A wave of cryptocurrency trading coincided with a major disruption to bitcoin exchange and caused the slowdown on other platforms, reflecting the difficulties traditional brokers have had with the frenzy of stock market activity.
The digital currency exchange website Coinbase Global Inc. he said he was investigating on Friday an outage that prevented customers from trading in their web and mobile app. Another exchange, Bittrex Global GmbH, said an increase in traffic created technical problems on its platform.
Coinbase later said it was backing up the trade and was monitoring other issues. A Coinbase spokesman said a sharp rise in trade caused technical problems that disrupted trade. Bittrex declined to comment.
Bitcoin rallied 4.8% on Friday, with bitcoin worth $ 34,436. The most popular cryptocurrency has risen sharply over the past year, gaining converts from investors worried that central banks and governments, in their efforts to counteract the economic effects of the coronavirus, risk devaluing fiat currencies.
Robinhood Markets Inc., which is on fire to suspend popular stock trading, also halted activity on its cryptocurrency platform. Robinhood said it temporarily disabled instant deposits for buying cryptocurrency, according to extraordinary market conditions, according to its website.
A Robinhood spokeswoman said customers can still use funds Robinhood has already received from their bank accounts to buy cryptocurrencies.
Wall Street is in a frenzy over GameStop shares this week, after members of Reddit’s popular WallStreetBets forum cheered on video game retail betting. WSJ explains how options trading drives action and what is at stake.
The Coinbase outage comes at a delicate time. The company said this week that it planned to go public through a direct exchange. Coinbase was launched in 2012 and is the largest cryptocurrency exchange in the United States. The San Francisco-based company has recently been valued at about $ 8 billion and has more users than Charles Schwab Corp.
platform.
Wall Street struggled to cope with the crescendo of activity in the financial markets this week. Several retail brokers dealt with falls and high-speed operators reported commercial problems.
For cryptocurrency exchanges, interruptions are nothing new. Platforms are usually slightly regulated, dominated by retail investors and prone to breakdowns as activity increases.
Cryptocurrency activity rose on Friday as popular online brokers restricted trading in highly quoted stocks, including GameStop Corp.
and AMC Entertainment Holdings Inc.
Thursday. They reacted to the large trading volumes spurred by investors who congregate on online platforms such as Reddit’s WallStreetBets forum.
Some digital currency advocates believe that investors who cannot trade their favorite stocks moved to cryptography.
“What happened this week with GameStop and other highly volatile impulse-traded stocks (those platforms that restrict trading) has led people to trade other assets,” said Meltem Demirors, strategy director at London CoinShares assets. “It avoids many of the problems we have seen in inherited financial markets and therefore we have seen retail investors change.”
One Friday that was actively traded with cryptocurrencies was Dogecoin, which was created in 2013 to mock the growing cryptocurrency industry. It was named after a popular meme on the Internet about a dog who could not spell.
According to CoinDesk, Dogecoin rose 250% at 11:30 am ET on Friday. At 4:45 p.m., it had slipped again to 125%.
Dogecoin features an image of the doge meme pet, a Shiba Inu dog that has been digitally modified to appear in everything from astronauts to Twinkies. Dogecoin has also become a popular topic on RedSit’s WallStreetBets and SatoshiStreetBets due to its cheap cost relative to bitcoin.
Awakening a sudden interest in the currency, Tesla CEO Elon Musk on Thursday published a fake magazine cover that said “DOGUE.” After its climb, a Dogecoin was worth $ 0.05 on Friday. According to CoinDesk, all Dogecoins in circulation are currently worth $ 7 billion.
Musk also updated his Twitter biography page to say “#bitcoin.” This came after Bridgewater Associates founder Ray Dalio called Bitcoin “a hell of an invention” in a letter released Thursday.
Write to Caitlin Ostroff to [email protected]
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