On June 2, 2020, an erratic outage on San Francisco-based exchange Coinbase has limited its users not to trade, marking the second time in less than a month that the platform has buckled under pressure.
The BTC price lost more than 10 percent in a matter of minutes on the evening of Jun. 2, dipping to lows of about $8,100 on Bitstamp exchange before rallying to settle on the $8,600 mark.
Unfortunately, Coinbase crashed offline just as the bitcoin price began to climb, leaving many investors on the sidelines of the virtual trading floor. The exchange immediately announced that they were experiencing intermittent downtime just as the bitcoin price leapt over $10,000.
They then reported via twitter that their system was “back up and running” after an agonizing hour or so for traders.
Coinbase is the largest bitcoin holder among exchanges with almost 1 million coins —more than double Singapore-based Huobi and 3 times more than Malta-based Binance.
Unfortunately, its recurrent outages every time there is extreme volatility on bitcoin has left the crypto community enraged.
Indeed, Coinbase has been very disappointing despite being fully compliant with US regulatory oversight and has been outpaced in security, reliability and trustworthiness by other exchanges with less oversight, such as Nexo and Celsius.
Twitter Community Reacts
The impact of Coinbase’s outages is devastating to the bitcoin and cryptocurrency ecosystem, with the trading platform crashing during abrupt moves in BTC prices an astonishing four times since March of this year.
Following the latest crash, Dan Gambardello, the chief executive officer of recruiting firm Crypto Capital Venture tweeted his dismay over how a major exchange with an $8 billion valuation could drop offline each time BTC pumps 5 per cent.
The frequency of Coinbase outages also prompted some in the crypto community to caution against using the exchange.
“I would highly suggest when you get in, get those funds off that exchange,” advised one twitter user.
Similarly, Rachel Siegel, a bitcoin content creator who warned users to take their BTC coins out of Coinbase last time the exchange crashed, reiterated that this is not the first time Coinbase has gone down and it surely won’t be the last.
Coinbase Accused of Hating Bitcoin
At the end of last month, just as BTC rallied to around $9,000, Coinbase experienced a similar outage, despite data provider Skew reporting that Coinbase trading volume wasn’t disproportionately high compared to other peaks in volume during the prior 2 weeks.
These sort of strange occurrences have led some to argue that Coinbase isn’t a company that cares about bitcoin. For instance, Reddit user cryptening directed a nasty remark at Coinbase stating:
“Bitcoin is the only crypto they can’t control because it actually is decentralized. This is why they promote shitcoins and hate bitcoin.”
These intermittent issues date as far back as 2017, when Coinbase exchange suspended Ethereum and Litecoin trades due to outages on its platform.