Coinbase struggles with outages during cryptocurrency volatility

Elon Musk's turn against Bitcoin prompted the selloff.

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Representation of Bitcoin cryptocurrency is seen in this illustration photo taken in Krakow, Poland on April 27, 2021. (Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images)
Jakub Porzycki/NurPhoto via Getty Images

Now isn't the greatest time to be a cryptocurrency trader. Coinbase suffered an hours-long outage this morning (May 19th) that hindered transactions on the exchange. The company had pinpointed the main issue and was rolling out a fix as of this writing, but it also noted a separate problem with delayed Etherium and ERC-20 withdrawals due to "network congestion."

The outages came right as crypto traders continued a massive selloff initially prompted by Elon Musk suspending the use of Bitcoin. Yahoo Finance noted that multiple currencies dropped by large volumes on the morning of the 19th, with Bitcoin dropping about 22 percent, Etherium falling 30 percent and the Musk-supported Dogecoin plunging 32 percent. China's ongoing crackdown against non-official cryptocurrencies was also believed to play a role.

It won't be surprising if the currencies recover. However, the selloff is a reminder that cryptocurrencies are still very volatile compared to conventional investments — it doesn't take much to erode a significant amount of value, even if many are comfortable with digital currency at this stage.

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