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Coinbase Crashes For Second Time Amid Market Rally
- For the second time in a week, Coinbase has suffered a glitch resulting in long load times and some users seeing zero account balances.
- The glitch was triggered by a surge in traffic in response to bullish price action across the crypto market, particularly Bitcoin which pumped almost 8% in 24 hours.
- Coinbase Support now says the issue is resolved, although some X users report ongoing problems.
The worst nightmare of any crypto investor is to log into their account and find their balance has suddenly, and mysteriously, gone to zero. For some Coinbase users this is exactly what happened yesterday, compounding panic experienced after the same issue happened less than a week ago.
That’s right—Coinbase, the largest US-based cryptocurrency exchange, glitched yesterday for the second time in a week after traffic to the exchange again surged in response to bullish price action across the crypto market.
Related: Ethereum Co-Founder Says Crypto Unstoppable, Part Of New System
Coinbase had claimed to have resolved the glitch last week but it seems the problem has persisted. The exchange has assured its users their funds are completely safe and the glitch is purely a display issue.
Bitcoin Surge Causes Display Glitch
Traffic to Coinbase was again up substantially on Monday in response to Bitcoin’s almost 8% surge — the OG crypto now sits at over US$68,000 (AUD$104,000), within touching distance of its all-time high of US$69,045 achieved in November 2021.
According to Coinbase, this spike in traffic led to technical problems resulting in increased loading times for end-users and “intermittent” zero balances, but did not impact users’ ability to trade.
Coinbase Support posted to its X account at about 1pm Monday US Pacific (about 8am Tuesday AEDT) time that it had implemented a fix which had resolved the zero balance display, however some users complained in the post’s replies that they were still experiencing the problem.
Market Turbulence Hard To Handle For Exchanges
Handling the enormous increases in traffic that come with bull markets is notoriously hard for cryptocurrency exchanges.
Speaking to Bloomberg, David Schwed, the CEO of blockchain security firm Halborn, said Coinbase’s current scaling issues demonstrates how young the industry still is and shows that crypto infrastructure providers are still learning how to deal with the enormous ups and downs of the market:
It’s a learning lesson for the industry. We are still early in many respects.
David Schwed, CEO of Halborn This is not a problem specific to Coinbase — all exchanges struggle with it — but right now it seems Coinbase is struggling more than most.
The reason for this is that during bear markets interest in trading crypto dwindles to almost nothing. For the most part only the truly committed HODLers continue accumulating during the bad times in crypto, so exchanges have to reduce the resources they commit to handling traffic.
Related: Judge Rules Crypto Assets Are Securities, Even When Traded on Exchanges
When a bull market comes along though, every man and his dog, and his dog’s favourite toy, wants to get in on the action—and the exchanges struggle to scale to meet this demand. For example, last week Coinbase’s traffic increased, quite suddenly, by over 10x.
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
