In a dramatic day for cryptocurrency markets, Bitcoin’s price spiked to nearly $64,000, causing major disruptions for users of Coinbase and Robinhood.
The surge, which saw Bitcoin reaching its highest price since October 2021, was met with technical difficulties that left many users in a panic.
Coinbase experienced what it termed “degraded performance,” with many users reporting their accounts showed a balance of $0. The issue was acknowledged by Coinbase at 9:40 PST on February 28, 2024, with America’s largest crypto exchange assuring users that their assets were secure despite the alarming display errors. “We are aware that some users may see a zero balance across their Coinbase accounts and may experience errors in buying or selling,” a statement on Coinbase’s status page read.
Similarly, Robinhood users faced hurdles in executing crypto transactions, venting their frustrations directly to the platform’s support team. San Francisco-based crypto exchange Kraken also reported issues with web and mobile connections, though it announced a fix was in progress by late afternoon UTC.
Coinbase’s CEO, Brian Armstrong, took to X to explain the glitch, attributing it to an unexpected surge in traffic that exceeded the company’s model by tenfold. Armstrong highlighted the ongoing efforts to enhance auto-scaling solutions to accommodate such spikes in activity without compromising service.
Despite the scramble to stabilize the platforms, Coinbase assured continued improvement in trading activities, with customer login and intermittent improvements in transactions. However, the company cautioned users about potential errors due to the sustained high traffic.
The glitch and subsequent service disruptions come at a time when the crypto market is witnessing significant liquidations, with Bitcoin’s price movement stirring a frenzy among traders and investors alike.
Institutional investors, however, appeared unaffected by the disruptions. Nate Geraci, president of The ETF Store, noted that Coinbase’s institutional custody services, which is used by spot Bitcoin ETFs issued by giants like BlackRock and Grayscale Investments, remained stable. Geraci also mentioned that diversifying custodial relationships has always been a strategic goal, irrespective of the day’s events.
