The brief but surprising rise in the price of XRP on the Gemini cryptocurrency exchange caused the token's market value to skyrocket to trillions of dollars.
XRP's Market Cap Rises to Trillions Shortly on Gemini Due to Pricing Error
This error is thought to have occurred due to low liquidity after XRP was relisted on the exchange.
For a brief moment at 11:30 p.m. Thursday, the price of XRP on Gemini skyrocketed to a staggering $50 per token.
This unexpected increase shocked the market and artificially increased the market value of the token to trillions of dollars. However, this figure was short-lived.
The rapid price surge was quickly corrected as the value of XRP returned to levels in line with other major exchanges.
This anomaly is believed to be a result of the low liquidity experienced following XRP's re-listing on Gemini.
During this period, a buyer may have placed an unusually large market order, causing the token price to spike to unprecedented levels.
Experts speculate that one possible explanation for the event is a “fake order” where a seller deliberately placed a highly inflated buy order at $50 per XRP.
This deceptive act may have been unintentionally made by a buyer who inadvertently “inflated” the transaction, causing instantaneous volatility.
The incident also revealed the fragility of XRP's liquidity on the Gemini exchange.
Market depth data showed that a mere $37,000 order was enough to trigger a 2% price action on Gemini, unlike larger exchanges like Binance, where a price change of the same magnitude would require millions of dollars' worth of orders.
The relisting of XRP on Gemini came after a major court decision in favor of Ripple Labs.
*Not investment advice.
