Trading on the New York Stock Exchange (NYSE) was abruptly halted today after Berkshire Hathaway’s Class A shares experienced a dramatic 99.97% drop in value. The equity last traded at $185.10, down from $627,214.90. The halt, coded as M, was triggered due to volatility, and the cause of the sudden decline remains unclear. Per The Deep Dive, the firm’s Class B stock was unaffected by the halt.
In a related incident, a glitch at the NYSE operator caused volatility trading halts in about a dozen companies, as reported by Bloomberg. This follows a recent pattern of technical issues affecting major exchanges. For instance, on March 18, the Nasdaq faced a three-hour disruption in premarket trading due to connectivity issues with its matching engine, as reported by the Bangkok Post.
The DTCC is currently trialing using blockchain technology with Chainlink for faster settlements of mutual funds, but it seems the stock market may need blockchain more than it knew. Chainlink’s decentralized oracle network could address such issues by providing accurate and reliable data feeds. Chainlink utilizes multiple independent data providers to ensure data accuracy and tamper-proofing, reducing the risk of single points of failure common in centralized systems. This decentralized approach enhances security and reliability, which is crucial for trading systems where timely and accurate data is essential.
Chainlink’s oracles aggregate data from various sources and use consensus mechanisms to validate information before it is fed into the blockchain. This process ensures data integrity, preventing manipulation or corruption. Additionally, Chainlink can provide real-time data verification, quickly identifying and correcting discrepancies to prevent erroneous trades and price swings.
Smart contracts supported by Chainlink can automate responses to certain conditions, such as significant stock price deviations, by halting trading or triggering alerts. This automation allows immediate action to investigate and resolve issues, enhancing market stability.
By leveraging Chainlink’s decentralized oracle network, stock exchanges can improve transparency and trust among market participants. The decentralized nature of the data feeds ensures no single entity controls the data, reducing manipulation risks and increasing market confidence.
Ultimately, blockchain technology, specifically Chainlink’s decentralized, tamper-proof data feeds and real-time verification capabilities, could significantly mitigate the risk of glitches and erroneous trades in stock exchanges, enhancing the overall reliability and stability of the trading environment.