In the early hours of May 10, Bitcoin experiencee a massive 20% crash within 30 minutes, liquidating more than $200 million longs on BitMEX.
Bitcoin managed to recover decently, and, at press time, is trading at around $8,800, after hitting $8,000 on many exchanges.
Unfortunately, Coinbase users suffered more as the exchange went down for the second time in less than a month, during a period of high volatility.
Users are Angry and Demand a Solution
A wave of tweets and other posts criticizing the exchange can be seen across a wide variety of platforms. Conspiracies are spreading Reddit, with users claiming that Coinbase might be shutting down on purpose to “sell its own holdings and do its own trades first.”
Other users have pointed out the fact that other exchanges also suffer from lag or outages during periods of massive volatility, however, it seems that Coinbase has been suffering from outages more, particularly in times of downward price action.
Is Coinbase Doing It on Purpose?
There are several user accusations, dating back as far as 2018, citing problems of an outage when the market moves downwards.
The Reddit post titled, ‘Is it just me or is Coinbase coincidentally always down when there are significant market movements?’ is an example of a thread describing the same problem.
Most users believe the outage events are simply because Coinbase does not have the capacity to sustain high volumes of trading. If this is true, it is a sad reality given that the highest revenue generator in the crypto space has not invested the money in its infrastructure.
Lack of concern for user experience may be true given the near-monopoly Coinbase has over fiat onboarding for US-based cryptocurrency traders. Binance’s US division became only a recent competitor, but that too with a minor market share.