After a screenshot showing approximately $24,111 worth of Bitcoin on Binance went viral on X, Changpeng “CZ” Chao fired back, claiming that the move was not a broader market crash but rather a microstructural glitch in the newly listed thin BTC/USD1 pair, and that the exchange itself was “not involved in the trade.”
Did Bitcoin really crash to $24,000?
Sharp Core appeared to be independent of BTC/USD1, a market traded in USD1, a stablecoin launched by Trump family-backed World Liberty Financial. According to exchange data cited by the trader who shared the screenshot, the price of Bitcoin quickly rebounded within seconds towards the prevailing Bitcoin price of over $87,000.
Mr. CZ’s explanation was simple and clear. In an illiquid order book, a single active order can print extreme prices before arbitrage closes the gap. “This actually indicates that the exchange was not involved in the trade. The low liquidity of the new pair meant that one large market order could cause the price to skyrocket, but arbitrageurs quickly corrected that. Since the pair is not included in any index, no liquidation occurred.”
The Binance founder shared a breakdown of analysis from Solve Protocol’s Head of Business Development Katherine Chan, who said the move was a “liquidity event” rather than a Bitcoin collapse. She linked this disruption to a promotion between Binance and USD1 offering 20% APY fixed deposit trading, which she claimed encouraged users to exchange USDT for USD1, temporarily pushing USD1 to a premium.
“Many users exchanged USDT → USD1, pushing USD1 to a 0.39% premium, which is huge for a stablecoin.Smart money is the best option for SolvBTC or SolvBTC-BTCB Smart Lending Market (APY~0.5%) They borrowed USD1 from @lista_dao. They either deposited USD1 directly or slowly sold it on the spot to meet the demand. Then someone thought, “Why not sell it via BTC/USD1?” Problem: BTC/USD1 liquidity is very thin. Its market orders wiped out most of the buy orders, causing a temporarily very low price,” Catherine explained.
“The arbitrage bot instantly bought it back,” she wrote. “Nothing will change in the fundamentals. There will be no mass liquidations.”
The episode also featured the familiar aspects of crypto paranoia. One user, Vera (@doomsdart), framed this as an organizational signal: “Cz and the Trump family are telling us what they’re going to do to our coins. Get ready.” In contrast, CZ’s response suggests the opposite. The idea was that the speed of arbitrage and the lack of cascading liquidations were evidence that venues were not “printing” the market-wide price at all.
For traders, this result is not as dramatic as the screenshot suggests, but it is still significant. New market-asset pairs can be structurally fragile, and promotions that rapidly concentrate flows into a single stablecoin can leave an unusually thin order book in their wake. In this type of market, a single market order can make headlines before creating a trend.
At the time of writing, Bitcoin was trading at $89,298.
Featured image created with DALL.E, chart on TradingView.com
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