Bitwise says Coinbase’s technical issues are similar to Facebook’s past and that Bitcoin ETFs are unlikely to be affected.
After Coinbase experienced its third technical issue in less than 10 days amid massive trading volumes across cryptocurrencies, Bitwise CIO Matt Hougan offered a huge helping hand as many people turned to X to voice their concerns or complaints. .
“Coinbase has always crashed in past bull markets, but still grew like crazy.” Hougan Posted in. “That’s really the theme of internet history: Facebook has crashed all the time, but it still has billions of users.”
Hougan’s comments about Coinbase’s ongoing technical issues come shortly after the U.S.-based exchange announced on Thursday that it was “experiencing a lot of support and response times may be 48 hours or longer.” The statement follows Monday’s announcement that Coinbase’s trading platform was experiencing problems with excessive cryptocurrency trading, causing some customers’ account balances to show as $0. Less than a week later, a nearly identical problem arose as Bitcoin prices soared.
Coinbase did not immediately respond to questions asking if technical issues were still occurring, but plenty of criticism has appeared online suggesting this is the case. The Block has independently tested Coinbase’s app and found it to work properly.
“Once is no big deal. Twice is a red flag. What about third time? How is this possible in such a wealthy, technology-oriented company?” Bloomberg senior ETF analyst Eric Balchunas asked Hougan via X on Friday.
Hougan said Coinbase’s issues are likely to affect retail users rather than institutional customers who have chosen Coinbase as the custodian of their spot Bitcoin ETFs.
“The agency was fine and custody was a separate entity that was not affected at all,” he said. “Most ETFs trade through multiple OTC counterparties leveraging global liquidity, and there is plenty of liquidity on platforms other than Coinbase.”
Bitwise’s spot Bitcoin ETF, traded under the ticker BITB, uses Coinbase as its custodian. The exchange-traded fund had about $1.8 billion in assets under management as of Friday, according to The Block data dashboard.
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