Coinbase, a leading U.S. crypto exchange, experiences technical difficulties during Bitcoin's volatile price movements. Get insights into the latest outage and its impact on the crypto market.
Following a pattern set in motion years ago, prominent U.S. cryptocurrency exchange Coinbase revealed on Tuesday that "certain users might encounter glitches during transactions" as the price of Bitcoin hit its peak and then plummeted. This update, posted around 3 pm EST, emerged merely four minutes after the company declared the resolution of its previous issues with "intermittent transaction failures."
These recent technical challenges emerged shortly after Bitcoin's price surged to an unprecedented high—only to decline rapidly due to liquidations and sell-offs triggered by this milestone. The ensuing industry-wide frenzy and the associated headlines have sparked significant interest among retail investors utilizing platforms like Coinbase.
"Coinbase is dedicated to enhancing economic liberty for over 1 billion individuals," stated a Coinbase representative in response to Decrypt's inquiry regarding their system's stability. "We are encouraged by the market's enthusiasm and are actively enhancing the capacity and resilience of our systems."
Prior to the new record price surge, Coinbase worked tirelessly overnight to address availability issues, as indicated by a status update posted fifteen hours earlier.
"Some users may encounter sporadic errors in trading, deposits, and withdrawals on Coinbase.com," the company revealed late Monday. "If you encounter a failure, we suggest attempting your transaction again."
This latest disruption was detected by third-party monitoring service Downdetector, where reports of a Coinbase outage surged at roughly the same time as Coinbase's status update.
The cryptocurrency community on Twitter expressed various opinions, with many highlighting a "flash crash" in Bitcoin's price specific to the platform. Coinbase's BTC price chart illustrates a peak of $69,324 dropping to as low as $59,224 within five hours—a decline of over 6%, reverting the top cryptocurrency's value to that of February 27.
It's a recurring pattern for Coinbase to encounter difficulties during Bitcoin rallies, as interest in the leading cryptocurrency surges across the industry. Such occurrences are so regular that many view Coinbase crashes as indicators of an official Bitcoin bull run.
While it's understandable that crypto-related services and infrastructure might be strained during Bitcoin bull runs, widespread system failures like those experienced by Coinbase are unusual. For instance, status pages for competing exchanges like Kraken and Binance do indicate incidents coinciding with the current crypto frenzy, but these are confined to specific networks or cryptocurrency pairings.
For instance, the notice of "partial withdrawal suspended" on Binance for Bitcoin and Ethereum applies solely to the BNB Beacon Chain (BEP2), which Binance announced would be discontinued in February.
Coinbase boasts an estimated 110 million monthly active users, slightly less than Binance's estimated 128 million monthly active users. Kraken serves an estimated 9 million monthly active users.
The price of Coinbase stock (NASDAQ:COIN) has followed a similar upward-and-downward trajectory, climbing 80% over the past month from $119 to $229, but dropping by 6% over the past 24 hours, currently standing at $216 at the time of writing.
This remains a developing story, and updates will be provided as new information emerges.