Bitcoin surges to $64K, trading frenzy causes Coinbase outage
Yesterday, Bitcoin surged to $64,000, causing an overload on Coinbase's application which displayed customers' balances as $0. Coinbase CEO Brian Armstrong explained that the issue was due to excessive traffic load, exceeding their 10x model for increased traffic today.
Bitcoin hitting 64K, Ethereum challenging 3500, long and short positions are difficult to escape liquidation in the volatile market.
Table of Contents
Traffic Surges Over Tenfold
According to a report by The Block, Coinbase experienced a glitch in customer accounts showing a $0 balance yesterday due to increased traffic, causing errors in receiving funds and certain payment methods for some customers. However, Coinbase stated that it was a technical issue within the application, and customer assets were safe.
Coinbase CEO Brian Armstrong explained on the social media platform X that the glitch was caused by an overload of traffic, stating that Coinbase had modeled for a traffic increase of about 10 times and had load tested for it, but today's situation exceeded that number.
Keeping services up more than 10 times the cost is expensive but we need to continue to focus on auto-scaling solutions and address all obstacles, and thank you for your support.
Apps are now recovering.
We had modeled a ~10x surge in traffic and load tested it. This exceeded that number.
It's expensive to keep services over-provisioned, but we'll need to keep working on auto-scaling solutions, and killing any remaining bottlenecks. Thank you for… https://t.co/JXVppV57AF
— Brian Armstrong 🛡️ (@brian_armstrong) February 28, 2024
Institutional Custody Unaffected
Given Coinbase's significant position and influence in the Bitcoin ETF market, currently custodian to 8 out of the 11 Bitcoin spot ETFs issued, accounting for 90% of Bitcoin ETF assets, as reported earlier.
Nate Geraci, President of investment advisor The ETF Store, stated that the issuers of the spot Bitcoin ETFs were not affected. However, Geraci also mentioned:
Utilizing multiple custodians has always been our goal.