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Coinbase experiences crash as trading volumes continue to surge

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Each day, Coinrule will run through the state of the digital assets market for Blockbeat, your home for news, analysis, opinion and commentary on blockchain and digital assets

It looks like retail traders are finally joining the crypto party. Coinbase app downloads are one of the key indicators for retail interest in Crypto. Downloads have now propelled the exchange into the top 170 most downloaded apps, climbing nearly 90 places in 12 hours.

Coinbase is the app where new crypto users are usually first onboarded to crypto. It ranks as one of the safest, easiest-to-use, and most regulatory-compliant exchanges, inspiring confidence among its users.

On Wednesday however, the exchange went down with U.S. users seeing their crypto balances indicating “0” as Bitcoin hit $64,000. 

In traditional finance, investors consider Bitcoin a highly volatile asset. However, in the crypto world, people often see it as a slow-moving value stock compared to altcoins.

Yet, on Wednesday, we received another reminder of Bitcoin’s potential for extreme volatility, even as its market cap now exceeds $1.2 trillion.

Wednesday saw the most violent Bitcoin move of this bull market so far. In 20 minutes, there was a 10% swing in Bitcoin’s price.

The volatility was due to Coinbase going offline and displaying user balances as “0,” along with traders selling off their BTC to secure recent gains.

The outage sparked widespread panic as users feared their crypto had been stolen, worrying that Coinbase might become the next FTX or Mt. Gox.

This also impacted Coinbase’s stock, which dropped nearly 5% after the outage. However, this is a small blip on the chart, with Coinbase still up over 20% for the week. 

The introduction of the spot ETFs is the main factor for the recent growth, with Wednesday’s net inflows reaching new all-time highs of over $673 million.

Blackrock’s IBIT accounted for $612 million of that total. The trend of retail FOMO’ing at all-time highs appears to be consistent with previous cycles.

However, Bitcoin potentially reaching a new all-time high before the halving is not consistent with previous cycles. This will be a first if achieved. All eyes will be on the asset as the estimated halving date of 20 April approaches. 

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