Checking on the latest prices of their crypto holdings, investors of Bitcoin, Ethereum and other digital tokens visited the CoinMarketCap real-time tracker to their utter shock.
They saw an extreme drop in prices of up to 99 percent, showing that the crypto market has plummeted to the doldrums.
However, all they saw was actually not a real flash crash. It was due to a glitch on the CoinMarketCap website that first happened in the wee hours of Wednesday, CoinDesk reported. This glitch showed incorrect cryptocurrency trading prices, but was later addressed and solved within an hour.
By later Wednesday, prices went back to normal; however figures for the tokens' record highs remain erroneous. Bitcoin's record high price was pegged at $8.6 million, which is extremely higher than its record $69,000 in May 2021.
Coinmarketcap, which is owned by Binance, has been among the top resources and references for the crypto world. It monitors pricing and trading data on crypto exchanges in real time, comparing information against each other for confirmation before arriving at a final price published on site.
Read also: Bitcoin, Ethereum, Top Cryptocurrencies Continue Free Fall in Crypto Crash: $500 Billion Wiped Out
If a price of $49,000 is shown on CoinMarketCap's tracker, this means the value was a result of real-time monitoring of trading prices in a number of reliable crypto exchanges. But even with advanced technology, errors still happen. That glitch on CoinMarketCap displayed wrong prices of all the cryptocurrencies on Wednesday morning, even while the data on the exchanges remain accurate.
CoinMarketCap Bug: Wrong Bitcoin, Ethereum Price and Market Cap
The CoinMarketCap bug resulted in the Bitcoin price soaring to as high as $789 billion, providing a market capitalization of $14.7 quintiliion. Prices of other top cryptocurrencies, such as Ethereum and Cardano, also were erroneously posted, with Ether going for as high as $757,200 and ADA at $256, likewise showing meteoric rises.
Accurate tracking of prices of these crypto assets reveal that Bitcoin is actually trading at $48,998.13, Ethereum at $4,046.44, and Cardano at $1.31, based on CoinGecko real-time figures late Wednesday.
As a result, decentralized alternatives have been recommended to offer pricing data.
'Decentralized Oracle Networks' Seen as Best Alternatives to Single Price Resources
Chainlink co-founder Sergey Nazarov told CoinDesk that the glitch shows why blockchain apps and smart contracts should use "decentralized oracle networks." Depending on one data source, he said, is a "recipe for disaster," putting investments at risk.
Because of the glitch, decentralized finance (DeFi) projects that utilize CoinMarketCap data stopped their offerings to protect their operations. DeFi Chain, a Bitcoin-focused lending service, tweeted that it was automatically halting all DeFiChain Vaults to ensure the safety of its users' loans.
Due to an error with the @CoinMarketCap API, all DeFiChain Vaults have automatically been halted for now, ensuring the safety of your loans.
— DeFiChain (@defichain) December 14, 2021
DeFi protocols depend on smart contracts for decentralized services such as loans, utilizing pricing information from pricing platforms such as CoinMarketCap to guarantee that their offerings match current market prices. CoinMarketCap, meanwhile, addressed the bug and laid down their next steps in a tweet on Wednesday. It said that after the glitch was spotted and the issue resolved.
CoinMarketCap will reboot their servers as a last step that is part of its internal remediation plan.
Following the irregularities we observed on our platform this afternoon, despite the issue having been fixed, we will be rebooting our servers as a final step in accordance with our internal remediation plan. Apologies for the inconvenience.
— CoinMarketCap (@CoinMarketCap) December 15, 2021
