The post Bithumb’s Bitcoin glitch explained: balance error, forced selling, and a contained flash crash appeared on BitcoinEthereumNews.com.

A sharp, short-lived plunge in Bitcoin prices on South Korea’s Bithumb exchange on 6 February raised fresh concerns.  While the price drop briefly resembled a broader market breakdown, available data suggests the episode was driven by a localized system error rather than a systemic liquidity failure. Bitcoin on Bithumb’s won-denominated market fell more than 17% within minutes, briefly touching around ₩81.5 million before rebounding.  Prices on global exchanges remained comparatively stable, highlighting that the disruption was largely confined to one venue. What went wrong at Bithumb According to industry reports, the incident stemmed from a computer error during an internal compensation or event payout process.  Roughly 2,000 BTC was mistakenly credited to the accounts of hundreds of users. Each account briefly reflected balances worth hundreds of billions of won at prevailing market prices. The error appears to have been a classic “fat-finger” or system input failure rather than a deliberate transfer. Crucially, the credited balances existed only within Bithumb’s internal ledger and were not fully backed by immediately withdrawable on-chain reserves. Why users couldn’t withdraw the credited Bitcoin Despite the scale of the erroneous balances, a full-blown bank run did not materialize. Industry sources estimate that Bithumb’s actual Bitcoin holdings are around 50,000 BTC, far below the notional amount implied by the mistaken credits. Bithumb’s limited available reserves prevented users from moving the majority of the wrongly credited Bitcoin off the platform, even as internal balances temporarily showed far higher figures. Forced selling triggers a local flash crash While mass withdrawals were blocked, selling was not. Some users who recognized the error quickly sold their credited Bitcoin into Bithumb’s order books. Estimates suggest that over 500 BTC was dumped in a short time window. That sudden sell pressure overwhelmed local liquidity, sending Bitcoin prices on Bithumb sharply lower relative to…

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Filed under: News - @ February 6, 2026 8:27 pm