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Coinbase Experiences Technical Difficulties as Crypto Trading Volumes Soar

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Coinbase Faces Technical Problems Amid Surging Crypto Trading

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Due to a surge in cryptocurrency trading volumes, Coinbase has encountered technical disruptions. The exchange platform has suffered three significant service interruptions within a period of just ten days, sparking criticism and raising alarms among its user base.

Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, shared his perspective, likening Coinbase’s difficulties to the tribulations faced by other high-growth tech firms such as Facebook in their formative years.

During periods of heightened market interest in the past, “Coinbase experienced frequent downtime, but it still managed to expand significantly,” Hougan remarked on the platform formerly known as Twitter X. “Consistent growth despite technical setbacks is a recurring narrative in the history of the internet. Even with frequent outages, Facebook secured billions of users.”

Hougan pointed out that these technical glitches mainly affect individual traders, with institutional entities relying on Coinbase for custodian services of spot bitcoin ETFs remaining insulated from such issues. He elucidated that these ETFs operate with a network of over-the-counter partners, assuring sustained liquidity across several venues, not just Coinbase.

Even though Hougan maintains a positive outlook, skepticism about Coinbase’s capacity to adeptly manage growing demand persists. The platform, which has yet to issue a public response, has come under scrutiny from industry commentators and users, who are questioning its readiness for such challenges given its capital and technical prowess.

In an era where the cryptocurrency market is fast becoming a mainstream focal point, platforms like Coinbase are under increasing pressure to provide stable infrastructure and smooth operations, thus conserving user trust and promoting wider acceptance.

Also read: Coinbase Contests SEC’s ‘Empty Chair’ Interpretation of Securities Laws

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