The Coinbase exchange, a major purveyor of BTC investment options, seems to be down a lot, by the uptime standard of your garden-variety service level agreement – and what’s more, it seems to be down at just the times that users need it the most!
Turner Wright at Cointelegraph cites the recent bull run June 1 where Bitcoin spiked from near $9,600 to $10,380, in which hapless Coinbase users were unable to access their accounts to move assets. Another recent event, a downward turn where the platform was similarly unavailable, was a big sell-off May 9. Prior to that, those digging into the issue of Coinbase crashes discovered similar inadequacy April 29 with a 12% BTC spike.
“Coinbase’s status page includes updates on current outages, but cites nothing more than ‘connectivity issues’ for June 1, May 9, and April 29, and ‘network congestion’ on March 12,” BB writes.
It’s clear to most of us that a platform is not very useful if it crashes when volatility happens. In fact, you could make the argument that it’s actually harmful to investors, because their money is trapped in a volatile pattern. In other words, if the asset gets locked up when its value is changing rapidly, it’s a double whammy on investors who don’t actually have the ability to pull out when they need to, according to their financial strategies.
The Coinbase debacle brings to mind the failure of the RobinHood investment app in similar situations. Still, while the investment app has crashed a few times lately, Coinbase’s foibles seem to have deep roots.
“The overnight selling (of Bitcoin) seems to have been potentially worsened by technical outages at Coinbase, Inc., one of the big bitcoin exchanges,” wrote John Jagerson at Investopedia on June 28 of last year, during another major BTC event.
In addition, analysts chronicle a lack of input from leadership that leads investors to wonder – is the platform crashing on its own, or are insiders turning it off on purpose?
Oddly enough, exchanges and middleman asset holders do have something to gain by limiting trade volume during volatility. In the past, though, it’s been assumed that efforts to deliberately shut down systems would be off the table, partly as a matter of financial law.
Despite the existence of “circuit breaker” strategies, the pattern seemed shady enough to warrant calls to Coinbase, which, Cointelegraph reports, were not returned. Then there are these other reports from Redditors of Coinbase simply erasing their held assets (NSFW: language).
We will follow up if we hear anything more about Coinbase flash crashes. Meanwhile, hold to that old maxim: caveat emptor!