According to Coinbase CEO, the exchange must make infrastructural investments.
The trading platform has recently experienced service disruptions as a result of an increase in traffic.
Additionally, the exchange has come under fire for its frequent outages.
Due to the continuous outages that Coinbase Global Inc. has been experiencing lately, the exchange has stated that it will need to make infrastructure investments to address the issue properly.
High demand causes system shutdown on Coinbase.
The American cryptocurrency exchange Coinbase is adamant that enhancing its trading infrastructure will significantly reduce its downtime over the past few weeks. In a recent interview with Bloomberg TV, the CEO of the massive cryptocurrency company, Brian Armstrong, proposed this option. Armstrong claimed that a huge demand for trading caused several disruptions.
He clarified that the system crashed because the trading demands exceeded anticipated. Notably, Coinbase increased its capacity by up to ten times in anticipation of a spike in demand. This action was taken immediately following the approval of spot Bitcoin ETF trading in the area by the US Securities and Exchange Commission (SEC).
But in less than an hour, the rise in the price of Bitcoin to a new all-time high (ATH) caused a rush in traffic that was more than ten times higher than before.
Armstrong said, “It exceeded even our models in terms of the amount of interest that could come in in a short period.”
Outages are affecting Solana.
The Coinbase outage in February destroyed as much as $100 billion in Bitcoin’s value in 15 minutes when the cryptocurrency was only 10% away from its all-time high, which was set off by sudden inflows of Bitcoin ETFs. It also caused a great deal of volatility in the cryptocurrency market. Several Coinbase users observed that the amount on their accounts was $0. The cryptocurrency exchange experienced a repeat of the outage in a short while.
Downdetector data shows a surge in issue reports about the Coinbase outage in the last 24 hours. At the time of the reports, Bitcoin had just reached its all-time high. The exchange has consistently chosen to employ subpar tools and systems that are brittle under heavy demand, according to cryptocurrency pundit MartyParty.
Armstrong asserts that regardless of the cause—whether it be inadequate infrastructure, as stated by MartyParty, or subpar tools and technologies—these outages are growing more frequent and require adequate funding. In recent weeks, there have also been many disruptions to Solana’s top protocol. Restoring the trust of users requires addressing the underlying cause of these failures.
Furthermore, the CEO of Coinbase stated that the new offering has been successful for business even though the spot Bitcoin ETFs may have indirectly contributed to the outages.
