Major US crypto exchange Coinbase, as well as its professional-focused arm Coinbase Pro, experienced severe technical difficulties as the price of Bitcoin surged over 15% overnight on April 30. The last time this happened to this degree was summer 2017, which was followed by Bitcoin’s biggest investor influx to date.
Yet this time around, the underlying factors might be quite different.
Just like the last time, Coinbase crashed under huge trading volumes. Yesterday 61,000 Bitcoin was traded on the exchange, worth $540 million.
The exchange has seen levels of activity just shy of the bull run in 2017. So far this month, over 990,000 Bitcoin ($8.7 billion) has been traded on the exchange, just shy of the 1.03 million Bitcoin ($9.3 billion) that was traded in December 2017.
Speaking to Decrypt, Pedro Febrero, an analyst at Quantum Economics, noted that during the December 2017 bull run, there was a huge spike of new entrants in the market, which significantly increased the load on Coinbase’s platforms.
The Bitcoin halving is the driving factor
At the same time, global interest in Bitcoin is nowhere near the levels of late 2017 today, according to Google Trends.
“What I think this means is: there haven’t been many new entrants, however, a lot of people who already possess Bitcoin and altcoins seems to be re-active again,” Febrero told Decrypt, adding that “Therefore, the agitation in the Bitcoin market has been mostly due to current holders. My best guess? People are preparing for the halving event and trying to scoop some sweet BTC before supply halves.”
As Decrypt explained previously, the Bitcoin halving is an event where mining rewards—and, consequently, the rate at which new coins are being minted—are cut in half. And the next halving is just around the corner, currently scheduled to take…