Bitcoin has once again broken an important price milestone as the coin shot up nearly $1,000 to cross over the $10,000 mark. There are a few reasons being reported as to why this rally is happening, including the unrest in the United States, but for crypto users of Coinbase, an outage struck at the worst time.
It is not too uncommon for cryptocurrency exchanges to suffer outages at times of increased trading, however, this is inexcusable, especially when the platforms are some of the largest in the space. This year alone there have been some rather big outages — five from derivatives trading platform BitMEX, and this latest one from Coinbase.
According to the status update provided by Coinbase, the platform was “observing increased latency” and started investigating the issue at 16:14 PDT. The exchange did not disclose exactly what was behind the outage, but it was rectified within an hour.
An ongoing issue
As mentioned, the issues of exchange outages at poor times has been something that has dogged many users of rather large exchanges in the past. The concern is that when the market is in movement, there will always be a rush to the exchanges to take advantage — and this is the worst time for an outage.
For Coinbase, this is not the first time either. About a month ago, when Bitcoin dropped in a few minutes from nearly $10,000 to below $8,000, the exchange went offline again. The company later explained that it had experienced connectivity issues at that time and delayed sends for ETH and ERC-20 tokens because of network congestion. However, many users reported that the website was inaccessible.
Of course, it is not just Coinbase that has these issues. BitMEX, once regarded as the biggest derivatives crypto market trading platform, has suffered major outages this year too — as many as five.
Most damaging was when the market collapsed in March due to the Coronavirus pandemic gears, BitMEX went down with data showing that during Bitcoin’s sell-off, BitMEX liquidated $1.2 billion worth of long contracts on its platform alone, causing one of the most intense long squeezes in the crypto history.
The real issue with such outages is that, despite the loss of trading opportunities, the reputation of the crypto space takes a bad knock too. In the traditional markets, if a platform like CME faced similar outages it would be lambasted and evacuated quickly, but this is not the case in crypto.