The popular crypto exchange Coinbase has come under scrutiny recently by the greater cryptocurrency community, after widespread frustration over system outages during peak Bitcoin volatility has boiled over.
What’s causing the issues and why can’t Coinbase keep up with the meager crypto demand currently, and what does this mean for the next bull market if and when it happens?
Coinbase Can’t Seem To Keep Their Platform Stable During Bitcoin Volatility
Last night, Bitcoin price jumped by over $600 in less than an hour, just ahead of the first daily close of June 2020. Also during this time, the popular San Francisco based cryptocurrency platform experienced a system outage that left users unable to trade the volatility.
What’s wrong with Coinbase? pic.twitter.com/R6rwzHSgS3
— Zack Voell (@zackvoell) June 2, 2020
Volatility is what brings traders profits, so being unable to access the trading platform where they keep their Bitcoin makes the platform far less appealing.
Related Reading | Major Crypto Assets Are Preparing For Powerful Volatility Against Bitcoin
Thus far, it’s remained amongst the most popular fiat on-ramps for US crypto investors, who dominate the lion’s share of the overall market.
The cryptocurrency community erupted in frustration, wondering why one of the most dominant and longest-standing crypto platforms can’t get its act together.
Speaking of a rigged system…you have one job to do @coinbase You’ve had years to fix it. #shameful #rigged #oneofthem #dumpcoinbase pic.twitter.com/GCUCG2xeoT
— RE₿ECCA (@I_Make_Lemonade) June 1, 2020
Traders everywhere voiced their annoyance over the lack of access, while analysts questioned why this was happening at all given the relatively low levels of interest in cryptocurrencies and Bitcoin at the moment.
How Will This Impact the Next Bull Market If The Most Popular Fiat Onramp Can’t Clean Up Its Act?
This wasn’t the first Coinbase outage in recent weeks, which has only added fuel to the fire of already upset traders.
What’s more concerning, however, is the fact that Coinbase can’t keep up with current levels, then how will they expect to support the influx of users during the next bull market?
Dear @coinbase, I ask this with much respect – How does an exchange with an $8 billion valuation crash every time Bitcoin pumps 5%?
I genuinely would like to know
— Crypto Capital Venture (@cryptorecruitr) June 2, 2020
Coinbase CEO Brian Armstrong was famously quoted for stating that bear markets are used to build for the next bull market.
“We use the down cycles to build a strong foundation so we can thrive in the next growth cycle,” he said, in a now-deleted tweet.
Somewhere along the lines, this effort to build may have been lost, and what remains is a platform that appears to be woefully underprepared for any increase in its userbase.
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The crypto market is jam-packed with competitors, and leadership roles like what was seen with BitMEX can easily fall from grace. Coinbase remains one of the most important and popular fiat onramps in the crypto market, but if system outages continue to plague traders, the throne will soon be challenged.
Can Coinbase retain the crypto crown for the next bull market, or will system outages continue to leave them looking like the court jester instead?