Coinbase's botched wallet upgrade: Is it an accurate indicator?
In response to a small but significant incident that occurred during the previous day's bitcoin spike, Coinbase CEO Brian Armstrong said that the company experienced wallet issues due to unexpected traffic. Bitcoin spiked, exchange servers heated up, and as we've seen in previous experiences, Coinbase generated a bug.
After widespread reports of Coinbase users logging in to find their wallet balances were zero, CEO Brian Armstrong said Wednesday afternoon that the problem had been resolved. Armstrong said the problem exceeded Coinbase's model, which can handle up to 10 times the predicted traffic, and said the solution would be upgraded. Coinbase described its efforts to deal with the "massive traffic spike" and apologized for any problems it caused.
Those long involved in the crypto market know. Coinbase's history of going down during traffic spikes has been used as a positive market indicator that something big is about to happen, sparking another opportunity. Often, crypto exchanges have experienced server outages or application failures during bitcoin rallies, followed by massive spikes in user traffic and trading activity, along with extreme unpredictability in bitcoin prices. Around the time of the Coinbase outage, a number of influencers and analysts wrote about the arrival of the ants.
So let's summarize what we know about Coinbase's bitcoin metrics.
- Coinbase went down when bitcoin hit a high of $19,345 in 2017.
- The halving attack by pomo-filled ants in May 2020 sent Bitcoin up 15% and Coinbase crashing.
- When bitcoin hit a high of $40,000 in 2021, Coinbase was brought to its knees. The next day, an 8K thunderstorm hit and bitcoin closed at 32K.
- It also crashed in May 2021, when the price of bitcoin dropped 30% in a single day.
- 2021 may be a painful memory for Coinbase. It also had problems during bitcoin's peak in November of that year.
Unlike exchanges for other assets, crypto exchanges operate 24/7, which means developers don't have as much time to troubleshoot and address technical issues. Errors and server outages, especially during high-traffic hours, are always a problem for crypto exchanges.