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Why Have Crypto Trading Platforms Been Experiencing Outages Lately?

Publish date: Thu, 25 Feb 2021, 07:05 PM
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General investment news and blog posts

Lately, the number of crypto trading platforms experiencing outages has grown. In less than a month, several trading platforms have had to suspend trading of crypto assets raising questions on what could be the problem. It turns out when the prices of crypto assets such as Bitcoin go up, then exchanges suffer outages due to frenzied trading activity than they can handle.

This leaves users of these exchanges with no ability to buy/sell assets, fund accounts, or conduct any other businesses shutting them from taking advantage of the rising crypto market. The platforms mostly affected by these outages are centralized crypto exchanges that allow users to buy/sell crypto coins such as Bitcoin. At such times one can’t help but wonder what solution they have to take advantage of the rising price.

One such place is platforms that offer derivatives based on crypto-assets such as PrimeXBT. On the platform, you don’t have to worry about purchasing the actual asset or having to hold it since you will be dealing with CFDs. And at a time when the price is rising sharply, you can speculate on its upward trajectory and profit. And even if the price drops, you can still bet on that and still make returns. If outages of centralized exchanges can prove troublesome, then adopting CFD platforms can help you capitalize on the market movement. For example, by checking the PrimeXBT guide, you can see how easy it is to get started on such platforms.


Rising Number of Outages

The first to experience an outage was Coinbase, one of the largest cryptocurrency exchanges worldwide. This happened when Bitcoin crossed the $40,000 mark. Then it was followed by Kraken citing “heavy loads” before resuming routine services a few hours later.

And just two weeks ago, Binance became the latest to experience an outage as Bitcoin reached $48,000. However, the platform was quick to clarify the outage was a result of a maintenance issue. Last year when Bitcoin surpassed its all-time high of $20,000, Binance was one of the platforms which went offline.

Outages have become a recurring problem among the top centralized exchanges due to increased trading activity once prices rise. The recent Bitcoin rally resulted from pumping by prominent individuals, including the richest man on the planet Elon Musk. Recently he changed his Twitter bio to Bitcoin before news of Tesla investing around $1.5 billion in the cryptocurrency broke out.

Musk updating his profile with the word Bitcoin was alone responsible for the coin adding over $5,000 within a few hours.


Increased Interest Among Retail and Institutional Investors

Lately, there has been growing interest in Bitcoin and other cryptocurrencies thanks to a combination of global macroeconomic instability and growing appetite by institutional investors.

The problem with crypto exchange outages is that it significantly affects the trading volumes of crypto assets. Top exchanges are aware of the problem and are working towards finding a resolution.

According to Coinbase CEO Brian Armstrong, the company is investing in additional servers and customer support. This will ensure the platform can handle increased traffic in the future. It’s a solution that seems perfect to handle the situation. Other exchanges with many users should implement it, thereby saving their client base from missing out on incredible opportunities.

Still, for the user that feels they can not afford not to participate in the market when it offers the best opportunities to profit, they can consider exploring platforms like PrimeXBT, which help exploit small price changes with incredible returns.

Some platforms will experience outages when prices rise; others will intentionally suspend trading activities to their customers’ irk. This was the case with Robinhood app, which suspended Dogecoin and Gamestop’s trading as retail investors flocked to the app to buy GME stocks. It was part of a coordinated short squeeze against a few hedge funds, including Melvin Capital. The campaign was mainly carried out on subreddit /r/wallstreetsbets. It caught the attention of the world before the group turned to Dogecoin. This saw Doge rise in value, managing to enter the top ten cryptocurrencies by market cap.

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