crypto Coinbase
Coinbase has suffered a widespread outage on the early morning of 14th of May 2024 at 0:42 PDT. The site had become inaccessible. The news of the outage was first shared by crypto groups on Reddit and Twitter. However, within a few minutes, Coinbase's X.com account confirmed it. As of now, it hasn't become clear as to why the outage took place.
On social media platforms like Reddit and Twitter, users were furious as their they were stuck in the middle of their trades. A slight unexpected change in their market positions could even wipe out their entire capital.
The issue was identified after 33 minutes at 1:15 am PDT. Within the next few minutes, a fix was being implemented. However, Coinbase has not shared any detail on the specific reason.
The website was soon brought back online within an hour of the outage on 1:30 am PDT.
Some users also claimed that during the period of outage, their crypto balances went to $0.
We have earlier observed a similar crash in Shiba Inu's case during the first launch of the Shibarium blockchain. On Aug 16, 2023, Shiba Inu was scheduled to launch the Shibarium blockchain when an overwhelming amount of traffic led to the collapse of the website. Later it was found out that Shibarium's website received 16 million visitors in a single day as compared to their capacity of 4 million a month.
However, there hasn't been any overwhelming traffic on Coinbase's website. On the 13th of May, 2024, the Coinbase exchange experienced a trading volume of $630 million. This was even less than the traffic on the 11th of May, 2024 when the Coinbase exchange saw a trading volume of $2.2 billion.
Clearly the issue doesn't seem to be one due to user traffic.
A Reddit user, username conceiv3d-in-liberty, claimed that the Coinbase outage was a planned one as the exchange saw as many as 4000 Bitcoins being sold in a short span of just 2 hours. Clearly, this would have created liquidation issues as such a high number of buyers would not be available at such short notice. Below is an image attached with the claim.
Short Selling on Coinbase
This short selling made a 4% difference in Bitcoin's price as compared to other exchanges. A 4% shift in price is a great number and could trigger a sell-off on Coinbase and possibly other exchanges. Clearly, the exchange would not have wanted the unfortunate event to take place if the claim is true.
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