Bitcoin surges, exchanges heat up, and Coinbase has problems: lather, rinse, repeat. Following widespread reports that Coinbase users were logging in to see zero balances in their wallets, CEO Brian Armstrong said Wednesday afternoon that the issue had been resolved.
“We had modeled about a 10x traffic increase and load tested it,” Armstrong said on Twitter. “This exceeded that number.
“It is expensive to maintain over-provisioned services, but we will need to continue working on autoscaling solutions and eliminate any remaining bottlenecks,” he continued. “Thanks for bearing with us.”
We understand that some users may see a zero balance in their Coinbase accounts and may experience errors when purchasing or selling. Our team is investigating the matter and will provide an update shortly. Your assets are safe.
You can track this incident at https://t.co/a3pl4WiDhZ— Coinbase Support (@CoinbaseSupport) February 28, 2024
Previously, Armstrong said Coinbase was facing “a LARGE increase in traffic,” apologizing for any issues he encountered.
Cryptocurrency exchanges often experience outages during Bitcoin rallies, leading to huge increases in user traffic and trading activity along with increased unpredictability in Bitcoin’s price. If exchanges could reliably predict such spikes and provision their data centers in advance, they would likely be wealthy enough not to need customers.
Even so, Coinbase’s history of crashes during traffic spikes has given cryptocurrency Twitter another opportunity to mock the exchange, casting the familiar technical difficulties as a positive market indicator.
JUST ENTERED: Not down
— Kraken Exchange (@krakenfx) February 28, 2024
“The Coinbase app is down,” Reflexivity Research co-founder Will Clemente wrote on Twitter. “We are so far behind.”
The Coinbase app is unavailable
We are so far behind
— Will (@WClementeIII) February 28, 2024
“The collapse of Coinbase is a bullish sign,” said Alex Valaitis, co-founder and COO of Chateau Capital. “Retail is coming back!”
Coinbase’s collapse is a bullish sign.
Retail is coming back! pic.twitter.com/CoP3tuWz39
— Alex Valaitis (@alex_valaitis) February 28, 2024
“It’s like the canary in the coal mine that the gigabull is just starting,” said Zeneca, founder of Zen Academy. “Retail…is it coming?”
It’s like the canary in the coal mine that the gigabull has just started
Retail…is it coming? https://t.co/ioO2oEPCE1
— Zeneca 🔮 (@Zeneca) February 28, 2024
The story of bad days for Coinbase joining good days for Bitcoin is well established. In 2017, Coinbase collapsed as Bitcoin reached its all-time high of $19,345. Coinbase collapsed again in April 2020 when the price of Bitcoin surged 15% overnight on April 29 as Bitcoin investors prepared for the May Bitcoin halving and the onset of FOMO.
Coinbase Collapsed as Bitcoin Skyrockets Today.
— Pomp 🌪 (@APompliano) April 29, 2020
Coinbase collapsed once again in January 2021 as the price of Bitcoin approached $40,000 before falling 25%, $8,000, to $32,000 the next day. When the value of BTC dropped more than 30% in 24 hours in May of that year, another crash occurred. What about when Bitcoin will reach its all-time high in November 2021?
Coinbase reported “new connectivity issues” a couple of weeks later.
We are once again experiencing connectivity issues on https://t.co/ohqDivCZYw and Coinbase Pro. This may cause failed trades, delayed transactions, and unexpected behavior on the web page and mobile apps. We are back to work to resolve the issue and restore full service.
— Coinbase Support (@CoinbaseSupport) November 24, 2021
Traditional exchanges operate 6 to 8 hours a day, five days a week, giving their developers plenty of time to address technical issues. Cryptocurrency exchanges generally operate 24/7, making system maintenance much more difficult, especially during periods of high traffic.
By Ryan Ozawa.
