- Armstrong said that the heavy trading demand was the cause of the many outages.
- The traffic spiked by more than 10 times in only one hour as a result of the Bitcoin price rise.
Following its recent spate of unscheduled failures, crypto exchange Coinbase has said that it would have to upgrade its infrastructure in order to adequately address the problem.
If Coinbase wants to significantly reduce the number of outages it has had in the last several weeks, it has to invest heavily in its trading infrastructure. In a recent interview with Bloomberg TV, CEO Brian Armstrong stated this proposal. Armstrong said that the heavy trading demand was the cause of the many outages.
Substantial Demand Rush
He elaborated on how the system crashed due to higher-than-anticipated trading demands. Notably, Coinbase doubled or even tripled its capacity in anticipation of a demand rush. Quickly after the SEC’s approval of spot Bitcoin ETF trading in the U.S, this move was made.
Nevertheless, the traffic spiked by more than 10 times in only one hour as a result of the Bitcoin price rise to a new ATH. Armstrong said that the quantity of interest received in such a short time surpassed even their expectations. The February Coinbase outage reportedly erased up to $100 billion in Bitcoin’s value in only 15 minutes, just as the cryptocurrency was approaching its all-time high (ATH) due to spot Bitcoin ETF inflows.
It did the same for the cryptocurrency market, bringing a great deal of uncertainty. It was noted by many Coinbase customers that their accounts showed a balance of $0. The crypto exchange saw a repeat of the outage shortly after the first one.