Bitwise CIO: Coinbase Issues Don’t Hinder Market Growth

Key Points:

• Coinbase faces its third technical issue in ten days amid heavy trading.
• Bitwise CIO compares Coinbase issues to Facebook’s past challenges.
• Institutional clients are largely unaffected; retail users bear the brunt of Coinbase’s technical woes.

Coinbase, a leading cryptocurrency exchange, grapples with technical glitches for the third time in under ten days, coinciding with surging trading volumes.

Read more: Coinbase Review: Top Trading Platform With Many Supported Features

Coinbase Issues Appear Amid Trading Surge

Bitwise Chief Investment Officer (CIO) Matt Hougan drew parallels to Facebook‘s past technical woes, suggesting they didn’t impede the social media giant’s growth.

Hougan expressed support amidst user frustrations, highlighting that Coinbase’s history includes frequent crashes during bullish market periods, yet it still experienced remarkable growth. Comparing it to Facebook’s early days, he noted that despite recurrent crashes, the platform amassed billions of users.

Recently, Coinbase reported delays in customer support responses exceeding 48 hours due to high volume. This announcement followed Monday’s disclosure of Coinbase issues resulting in some users seeing zero balances in their accounts, echoing similar incidents amid Bitcoin‘s price spikes.

Institutional Clients Unscathed as Coinbase Technical Woes Persist

Hougan emphasized that these Coinbase issues primarily affect retail users, contrasting with institutional clients, whose custodial services for spot Bitcoin ETFs remain unaffected. He clarified that institutional operations and custody are separate entities, with most ETFs trading through diverse OTC counterparties, tapping into ample liquidity beyond Coinbase.

Coinbase notably serves as custodian for Bitwise’s spot Bitcoin ETF, BITB, which currently holds approximately $1.8 billion in assets under management, according to The Block.

The ongoing technical challenges at Coinbase prompt reflections on the resilience of cryptocurrency exchanges amidst escalating market activity.