The crypto world was rocked on Wednesday as Coinbase users reported a sudden disappearance of their digital wallets, sparking panic among investors. However, it was soon revealed that the issue stemmed from a crash on the popular cryptocurrency exchange platform rather than a loss of funds.
Coinbase CEO Brian Armstrong stepped in to address the situation and reassure users, attributing the incident to a “large surge in traffic” coinciding with Bitcoin’s surge past $60,000, its highest level in two years. Users took to social media platforms to express their concerns, with some sharing screenshots showing their account balances reduced to zero.
One prominent crypto-trading personality, Ash Crypto, revealed a balance of “$0.00” on his Coinbase account, causing further alarm among investors. Coinbase acknowledged the issue in a post on X, stating that some users might experience zero balances and errors in transactions. However, the platform emphasized that users’ assets were safe and that its team was actively investigating the matter.
To keep users informed, Coinbase provided an incident report on its website, allowing traders to monitor the status of the outage and stay updated on any developments. Despite the initial shock and confusion, investors were reassured by the platform’s transparency and efforts to address the situation promptly.
Coinbase CEO Brian Armstrong addressed the recent outage, attributing it to a “large surge of traffic” as users flocked to buy, sell, or trade Bitcoin amid its price surge to $64,000. The influx of activity overwhelmed the exchange’s infrastructure, leading to disruptions in customer trading and functionality.
While Coinbase began to see improvements in customer trading roughly two hours later, persistent high traffic levels continued to cause issues such as errors in login, transactions, and payment methods for some users. Despite these challenges, Coinbase reassured customers that their funds were safe and that the platform’s team was actively investigating the situation.
The outage had significant repercussions for Bitcoin, causing the cryptocurrency to sharply drop from its peak of $64,000 to about $59,500. This marked the first time since November 2021 that Bitcoin surpassed the $60,000 threshold. The sudden downturn wiped out most of the gains made by the coin earlier in the day and resulted in approximately $100 billion being shaved off its market capitalization.
As of the latest update from Coinbase, Bitcoin’s price showed resilience, edging slightly higher to $61,174.20. Despite the recent crash, trading on the platform was gradually improving.
Established in 2012, Coinbase stands as the largest cryptocurrency exchange platform in the United States based on trading volume. Alongside Bitcoin, which remains the most popular and valuable cryptocurrency, Coinbase offers access to various digital currencies on decentralized blockchains, including Ethereum, Colana, and Dogecoin, among others.
The recent approval by the Securities and Exchange Commission of the first-ever US-listed exchange-traded funds (ETFs) to track Bitcoin marks a significant milestone for the broader crypto industry. This development offers institutional and retail investors exposure to Bitcoin without the need to directly hold the digital currency, signaling a new phase of adoption and legitimacy for cryptocurrencies.
The securities regulator approved applications, including from BlackRock, Ark Investments, 21Shares, Fidelity, Invesco, and VanEck, among others, according to a notice on its website.
Wednesday’s crash didn’t appear to have any impact on Coinbase’s share price, which rose nearly 2% by the close.
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