Technical issues on Coinbase led to user account anomalies during Bitcoin’s meteoric price appreciation.

On a day that saw Bitcoin nearing a record high, the Coinbase app succumbed to technical difficulties and faced an unexpected outage, leaving some users staring at a $0 balance in their accounts and unable to execute trades. The sudden glitch not only caused widespread panic among investors but also coincided with a sharp $100 billion drop in Bitcoin’s market capitalization.

The issues began unfolding early afternoon, with Bitcoin’s price tumbling nearly 9% from $64,000 to $58,700 between 12:15 PM and 12:30 PM ET. Notably, this abrupt decline was observed just as users of the Coinbase platform reported significant discrepancies in their account balances and faced errors during buying or selling operations. 

The timing of these technical problems, occurring precisely as Bitcoin was less than 10% shy of reaching a new all-time high, intensified the market’s reaction, leading to a rapid sell-off.

The price of bitcoin subsequently rebounded to $61,300 only to succumb again to the upper $59,000s, erasing all the major gains it had had today. At press time, bitcoin was trading at $60,453. 

In response to the unfolding crisis, Brian Armstrong, CEO of Coinbase, took to X to address the community’s concerns, stating, “We are dealing with a LARGE surge of traffic – apologies for any issues you encounter. The team is working to remediate.” His message acknowledged the strain on Coinbase’s systems caused by an influx of user activity driven by the volatile market conditions.

We are dealing with a LARGE surge of traffic – apologies for any issues you encounter. The team is working to remediate.

— Brian Armstrong 🛡️ (@brian_armstrong) February 28, 2024

Further communication from Coinbase Support sought to reassure users about the security of their assets, despite the alarming account display errors. “We are aware that some users may see a zero balance across their Coinbase accounts & may experience errors in buying or selling. Our team is investigating this & will provide an update shortly. Your assets are safe,” the support team tweeted, directing users to the platform’s status page for ongoing updates.

We are aware that some users may see a zero balance across their Coinbase accounts & may experience errors in buying or selling. Our team is investigating this & will provide an update shortly. Your assets are safe.
You can track this incident at https://t.co/a3pl4WiDhZ

— Coinbase Support (@CoinbaseSupport) February 28, 2024

In addition, the price of Coinbase’s stock $COIN declined 6% following the outage, reaching a low of $198. It has since recovered some of its losses. Before the outage, the stock’s price was at around $210 and is now trading hands at $203.

Adding a bit of humor to the situation, Kraken, a crypto exchange that directly competes with Coinbase, posted on X: “JUST IN: Not down.”

JUST IN: Not down

— Kraken Exchange (@krakenfx) February 28, 2024