Bitcoin’s Bull Run Breaks Coinbase; Exposing Possible Issues Ahead of The Public Offering
With Bitcoin ripping through milestones basically every week, investors are flooding the market, and activities are going through the roof. However, exchanges and trading platforms face the problem of sustaining their services with this influx of activities. Much like they did during 2017's bullrun.
Activity Influx Downs Exchanges
Yesterday, top crypto exchange Coinbase reported that it experienced connectivity issues on its retail exchange and Coinbase Pro trading service.
In a tweet, the Silicon Valley firm apologized for the service outages on its mobile and web apps, adding that it worked on getting things back to normal.
The exchange provided an update a few hours later, confirming that operations had resumed. Of course, that is cold comfort for traders who have lost profit opportunities as Bitcoin BTC -0.43% Bitcoin / USD BTCUSD $ 39,748.52
-$170.92-0.43% Volume 26.6 b Change -$170.92 Open $39,748.52 Circulating 18.77 m Market Cap 746.1 b 3 h “Innovative New Products” like Bitcoin Mini-Futures Leads to an Increase in CME Profits 5 h Crypto Lender BlockFi Sees Stay Of Execution In Ongoing BIA Saga 7 h Altcoins, Not Bitcoin, Drives the Latest 'Massive' Surge in Crypto Adoption: Report made a historic push past $40,000.
In such a market rally, arbitrage and profit opportunities come and go in a flash. Exchanges that are unable to stay functional risk losing customers as efficiency now drives the market.
Coinbase isn’t alone in this problem. Kraken, another top exchange and trading platform, told customers on its website that response times on its platform were slower than usual, and its application programming interface (API) was operating sub-optimally. Some clients also claimed to have difficulties connecting to the exchange’s site and mobile apps.
Like Coinbase, Kraken’s issue stemmed from heavy traffic. The same can be said with Binance, Bitfinex and OKEx. The exchange explained that it saw an unexpected hike in trading and transaction volumes, leading to server outages. Hours later, the exchange’s service came back up.
The problem with outages isn’t entirely new for crypto exchanges. With each milestone that Bitcoin reaches, many trading platforms and exchanges have had issues dealing with the increased traffic. For Coinbase, however, this problem is quite a common one.
Last June, the exchange witnessed a 400 percent surge in trading activity as Bitcoin broke past $10,000 for the first time in months. Trading was halted once more in September when Bitcoin hit $12,000.
Time for Coinbase to Sit Up
Issues like these would undoubtedly hamper the company’s standing in the industry, and they couldn’t come at a worse time for it. Last month, Coinbase confirmed that it had sent draft legislation for an Initial Public Offering (IPO) to the Securities and Exchange Commission (SEC). The Form s-1 is a prerequisite for a public offering, and it solidifies rumors that the Silicon Valley firm has been working towards such a move for months now.
Robinhood, a crypto-friendly trading app, is rumored to be on the cusp of a public offering. However, with a history of service interruptions that marred its operations in 2020, the company decided to pause its expansion. This isn’t a line Coinbase would like to toe.