12 ms·

Coinbase says buying and selling temporarily disabled amid price rout

135 points by smoser 9y ago

dopamean 9y ago
> "Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience," Coinbase said on its status website at 11:11 a.m., ET. What exactly is broken that needs to be fixed? Is there just a ton of trading volume and their system cant keep up ? Edit: I ask because the headline just says that prices are falling quickly and so Coinbase halted trading. This sounds a lot like a circuit breaker but then you read the article to find out something is actually broken. I'm really curious to know what the symptoms are of whatever is broken. Are trades taking too long to execute? Are people being fulfilled at prices different than they were quoted? What is actually happening?
- cevn 9y ago
  They go down practically every time there's a lot of volume. Not sure if they have publicly addressed what sort of infrastructure problems they're having though.
  - frgtpsswrdlame 9y ago
    Have they gone down when the price is surging upward? I only ever see them going offline when the price goes down but I may have missed something.
    - ISL 9y ago
      Volume is likely to be higher when the price is getting hammered. Panic, when it occurs, is more acute than ebullience.
      - akhatri_aus 9y ago
        Actually with volume its happened both ways. You can easily see from public data that volume doesn't only go mad when price is being hammered.
    - mrgordon 9y ago
      Yes the site always crashes under load
    - mhluongo 9y ago
      Just before the first futures it was surging and they went down. But anecdotally it does seem to happen more on the ride down
- api 9y ago
  If it's anything else such as allowing insiders to exit before a crash really takes hold, then people are going to jail.
  - tonyjstark 9y ago
    Why? Are there regulations in place that forbid coinbase to halt their service? This is not meant to be sarcastic, just wondering if there are laws in place even for unregulated markets like Bitcoin.
    - mtgx 9y ago
      Do you really think it matters? Nobody touched the bankers over the financial crisis because they didn't want to touch them, not because nothing "illegal" was going on. Holder and Obama said it themselves that going after them "would hurt the economy". That was their justification for not prosecuting people. Meanwhile they added 13 bogus charges against Aaron Swartz with a maximum sentence of 35 years for making some documents that were already internally public at the MIT, available to everyone. If the gov wants to make an example out of Coinbase, especially after they put up a fight in the SEC case, then they will.
- bhouston 9y ago
  I did predict a few weeks ago that if things fall quickly, the systems will do down and people will not be able to sell: https://news.ycombinator.com/item?id=15869668 https://news.ycombinator.com/item?id=15869668
- Klathmon 9y ago
  I have heard that since coinbase keeps all but 2% of their crypto assets in "cold storage" (offline storage that requires a physical trip to somewhere to spend), there are semi-frequent times where their "hot wallet" runs out of money, and they need to go and retrieve it from cold storage in order to continue. Naturally this would happen when there are large spikes in usage (which happen during swings in price) and people are trying to move cryptocurrencies out of coinbase.
  - mancerayder 9y ago
    So the latency are people's feet rapidly shuffling to another physical location? That doesn't make a good story for the convenience and transfer speeds of some of this technology. It feels like they're protecting prices or their capital reserves?
blhack 9y ago
There is something that feels extremely fishy to me about what has happened at coinbase over the last few days. For years I've told people to just store their coins on coinbase. I've been a big fan of their "vaults", and I've been saying that they are the shining beacon of legitimacy in this whole thing. I honestly don't know that I still agree with that. This whole rollout of BCH has made me honestly start questioning if I can trust coinbase anymore. I expect stuff like this from sketchy exchanges like what btc-e was, but not coinbase. That makes me really sad, since they were (still are, for now) such an incredible success story. I think there is going to be a lot of regulation coming and I'm not entirely sure that that is a good thing. It makes me pause for the same reason I wouldn't be sure that regulators telling me what webservers or programming languages I'm allowed to use would be a good thing. I really hope all of the "never keep anything on an exchange!" people aren't proven right again by coinbase of all people.
- wu-ikkyu 9y ago
  What advantages are there to storing BTC on Coinbase vs. your own wallet
  - minimaxir 9y ago
    User experience, which is important when you're trying to appeal to non-techies, like the ones fueling the Bitcoin spike in the first place.
    - sdenton4 9y ago
      Just remember that "everything was great until the normies arrived" is equivalent to "our shit didn't scale well."
  - blhack 9y ago
    A few days ago it felt so much easier to answer this question, haha. Coinbase puts a lot of work and effort into their security models. Storing coins yourself means that you now have to: 1) Physically secure your private key 2) Secure the machine that you use to interact with that private key 3) Ensure that that private key was generated in a secure way 4) Ensure that the ways that you interact with that private key don't cause any problems. etc. Storing your own keys is a bet that you are better at security than coinbase's team. That's not a bet I necessarily want to make.
deleted 9y ago
[deleted]
m3kw9 9y ago
The issue with this type of circuit breaker is that there is really no information to let people absorb and calm themselves. When you resume the trade people will still be clueless on why prices moved that way and resume their selling
chollida1 9y ago
Coinbase does a number of things that seem strange from a market perspective. There doesn't appear to be an auction to open/close or restart. Instead they seem to lock their markets and allow post only orders. The other things this screams is that 1) stop loss orders are useless in volatile markets. I've harped on this alot from the US Cash Equities side but it appears to be equally valid. YOu'll only end up getting filled at te worst possible price and miss the inevitable market rebound. 2) Coming from 1) Don't use leverage, you'll get your face ripped off one of these days due to volatility and you'll be asked to submit more margin just when you can least afford to and possibly be liquidated at the bottom.
- ISL 9y ago
  In a recent thread, stop-loss limit orders were mentioned, which would appear to address the bad-fill concern, to an extent.
  - chollida1 9y ago
    as far as I'm away they don't have them yet.
    - makomk 9y ago
      They're hidden under the "advanced" button when placing a stop-loss order. GDAX (the exchange side of Coinbase) actually have quite a plethora of order types... though they don't seem to let you change the time in force for the resulting limit order when the stop-loss triggers, for whatever reason.
- dahdum 9y ago
  They lock, other than scaling issues, because of liquidity. Bitcoin cash opened with a thin market and ran up to $9,500 in 4 minutes before they halted the market. Was still trading at ~$3k elsewhere at the time. An open/close or restart isn't needed because all assets are being heavily traded elsewhere. If they switch to post only the arb bots will fill their book over time. Leverage will rip your face off.
smaili 9y ago
Why is it they always seem to go down during times of sudden surges and dips? It almost feels like they’re trying to control the market of their platform rather than let it play out. It may indeed just be infrastructure but given the company’s age and decent amount of funding they have now, can scaling really be at play here?
- gnicholas 9y ago
  I have wondered this also. Coinbase clearly benefits from BTC and other cryptocurrency being "a thing", and rising prices help that happen. If the price of BTC that market watchers and news orgs quote is impacted heavily by the price on Coinbase, then their actions could have an outsize impact on the overall trend. I would be curious to hear from folks savvier than me about suspicions like this. EDIT: wondering why this is downvoted — I make a conjecture and then openly ask for perspectives of those who are more educated on these matters. If you disagree, responding would be helpful. We downvote things not because we disagree but because we think it doesn't add to the discourse.
- mattbeckman 9y ago
  Yes. Consider that the ramp up in Bitcoin has been happening since June. I recall they were adding 50,000 accounts per day. Suddenly, all the new folks that haven't experienced a bloodbath before are all trying to jump on and sell. I'm not surprised at all, really.
- not_kurt_godel 9y ago
  > It almost feels like they’re trying to control the market of their platform rather than let it play out. No, no, no, you see - that's the free market at work. Can't you see that everyone will simply pick another exchange and scammy practices like this will be evolutionarily eliminated? /s
randomerr 9y ago
Anyone remember this story from a few days ago? I think the insider trading has hit it's dump phase. Pump and Dump? Coinbase Suspends Bitcoin Cash, Investigates Insider Trading https://www.financemagnates.com/cryptocurrency/news/coinbase-suspends-bitcoin-cash-investigate-insider-trading/ https://www.financemagnates.com/cryptocurrency/news/coinbase...
thisisit 9y ago
It seems Coinbase's go to strategy every time markets are volatile. In case people are wondering why is this a recurring problem - this simply perils of Market Making in a volatile market. As a market maker for customer orders Coinbase needs to fulfill both sides. So to make money they buy from customers at low price and sell back at a high price. So they are collecting spread between bid and ask to make money. But what happens if the market moves rapidly in one direction? They end up selling low and buying high. So, they need to reset the market making algorithm. Or shutdown the site for a "fix", long enough that the volatility comes back in their range.
- ethbro 9y ago
  I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency? Seems like anyone doing so would inevitably get fleeced.
  - Blackthorn 9y ago
    > I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency? A large spread.
    - ethbro 9y ago
      Hmm. So are market makers only ever effecting instantaneous matches? I was under the impression they often held some portion of the asset between buy-sell or sell-buy in order to increase liquidity. (Which would explain why they like HFT, as anything that boosts trade frequency would decrease their exposure)
      - Blackthorn 9y ago
        They do hold underlying and have to hedge their risk in various ways. A large spread helps a lot.
- qeternity 9y ago
snissn 9y ago
Coin base has scaled too quickly they really should limit their user sign ups until they can get their support queue under control
psyc 9y ago
I’m getting pretty tired of playing whack a mole with these wretched exchanges. I recently left the dumpster fire at Kraken, only to sign up at, yep, Coinbase. Oh well. On to Bitstamp or Gemini I suppose.
- thinkmassive 9y ago
  You might want to give Binance a try. No affiliation, it just came recommended to me from some successful traders I’ve met when the topic of reliable exchanges came up.
  - alexanat 9y ago
    As a crypto trader Binance is where I do business. Their PC app is phenomenal for the most part, doesn't lag out like a lot of other exchange I've used.
- cmurf 9y ago
  A friend just bought Ripple on Bitstamp and it's taking upwards of two weeks to verify an account? I can physically walk to a bank and get foreign currency in person 1000x faster than this. I think all of this is speculation and hype, and only a small percent of people now have a use case met by these products.
popz41 9y ago
Move your coins over to GDAX, their sister company. When Coinbase halts trading, GDAX is usually fine.
- mr_spothawk 9y ago
  ^^ this has not been my experience
- makomk 9y ago
  GDAX shut down trading a few minutes ago, unfortunately. Performance issues with the REST API apparently. I think they've been seeing a lot of volume these past few hours.
ramphastidae 9y ago
I ignored all the warnings about Coinbase at my own peril. I tried to move my coins out of the exchange about 48 hours ago (shortly before the crash) but I made the mistake of purchasing a new phone about a week ago and not switching over my 2FA keys in Google Authenticator. They have an account recovery process in place but it takes "48-72 hours" to complete. I had to re-submit my ID, which was confirmed as verified, but now I just have to sit around and pray that they come through and the process is completed over a holiday weekend. Obviously partially my fault for not transferring my 2FA keys, but with all the stories of customer service being unresponsive for weeks, I'm not holding my breath.
- cma 9y ago
  That actually seems like a good thing. You want caution over a user failing 2FA. If you lost your 2FA keys despite knowing their response times imagine how bad it would have been if you mis-managed your wallet and just lost everything entirely.
- Fnoord 9y ago
  Sounds like you got yourself an expensive phone. Hope it was worth it!
peacelp 9y ago
How is bitcoin supply finite, if it keeps hard-forking.
- BallinBige 9y ago
  doesn't the fork create a new coin?
  - adjkant 9y ago
    Correct.
peacelp 9y ago
How is bitcoin supply finite, if it can hard fork?
- quickben 9y ago
  Forks aren't Bitcoin
- danield9tqh 9y ago
  Like saying how is gold supply finite if you can break a piece of gold in half. When Bitcoin forks the value is split between the two forks. If the market cap of Bitcoin before the fork is $10 Billion, the combined market cap of both sides of the fork afterwards will still be $10 Billion. There are double the number of coins because of the fork but now each person who had one coin has two and each coin is worth a fraction of what is was before. It's an increase in supply but an increase that is perfectly distributed among the previous holders.
  - adjkant 9y ago
    The split value is in theory but didn't seem to follow in practice. Anyone can create a fork, and the market will not be that efficient, even in the long run. I don't think the metaphor works for that reason. Simply, forking makes a coin that is not Bitcoin, and people can value it however they like. The only question is why they would value it at all. There are usually technical differences in forks that people believe are better.
  - alexanat 9y ago
    A better analogy in my mind is that Bitcoin can be gold coin, and a fork is someone making cardboard coin, coloring them gold, and then calling it a type of bitcoin. Forks are completely separate from bitcoin and are worth nowhere near as much.
sowbug 9y ago
Good opportunity for the old-timers who were daytrading in the 1990s to tell their stories of Datek, E*Trade, Ameritrade, Schwab, etc., failing during peak NASDAQ/NYSE markets. You know who you are -- drinking coffee and staring at multiple monitors while in your boxer shorts at home. 6:29am Pacific, watching Ron Insana and Maria Bartiromo on CNBC... This has all happened before. It will all happen again.
- stygiansonic 9y ago
  As I’ve said before, watching cryptocurrency markets evolve is like watching the entire history of financial markets being replayed as painful lessons are relearned.
  - CamelCaseName 9y ago
    Is there anywhere I can get a full rundown of the modern evolution of finance? I have a degree in it yet it all still send fragmented.
    - sowbug 9y ago
      I don't have an answer for you, but Reminiscences of a Stock Operator is required reading for anyone interested in the history of securities markets. It's fictionalized autobiography of a legendary trader in the 1920s. It could have been written yesterday or a thousand years ago. https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Lef%C3%A8vre/dp/0471770884 https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Le...
  - flycaliguy 9y ago
    Maybe Bitcoin was created by an A.I. to teach us all a lesson...
NelsonMinar 9y ago
Coinbase is the one exchange that's looked like a legitimate business. Between insider trading and execution problems, it's pretty alarming. (Who am I kidding? Clearly this is actually good for Bitcoin somehow.) Worth noting Coinbase has two kinds of systems risk. There's the technical risk of writing and running code correctly. And there's also the financial risk of them making the market in Bitcoin. Both of those tasks have gotten a whole lot harder recently as Bitcoin transactions have gotten slower and more expensive. Turns out building a global currency with a global 7 transaction / second limit may not be a good idea.
- aviv 9y ago
  I think their biggest risk is a compromised/rogue employee.
draw_down 9y ago
There’s a shocker.
idibidiart 9y ago
Coinbase.gov
- sctb 9y ago
  We've asked you several times already to please start commenting civilly and substantively, so we've banned the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
sathackr 9y ago
If you have USD in Coinbase that you'd like to buy with right now, you can use your Coinbase account at GDAX and transfer USD instantly to GDAX. Trades are working fine at GDAX. Pretty sure GDAX is also owned by Coinbase. I did it just now.
spraak 9y ago
It's telling to me about the hype bubble that this article is coming from CNBC.
esaym 9y ago
So if we shouldn't be leaving our coins on coinbase, where do we leave them? A full wallet is not an option for many of us. I don't want to have to download 100's of gigs of data just to store my coins... I even tried to move from bitcoin to etherum since I thought that wallet might be smaller. And it was, but after leaving it running for 2 days it still had a ways to go and all the IO it was doing was really trashing my SSD. At that point I looked into hot wallets like jaxx. But then on /r/jaxx, there were many people complaining about using jaxx only to have had their private keys stolen. So at that point I just left everything on coinbase :/ Is there any decent hot wallet out there or anything else?
- cdancette 9y ago
  Why don't you use a paper wallet or just keep your private key on a hard drive? Are you exchanging your bitcoins often?
- tokenizerrr 9y ago
  Electrum, Mycelium
- mr_spothawk 9y ago
  order a Trezor and wait for it to arrive in February... until then, breath deeply.
  - ghostbrainalpha 9y ago
    If you pay $20 extra, they will deliver Trezor's now in 3 days.
  - Fnoord 9y ago
    Ledger Nano S took ~4 days to arrive from France to The Netherlands. During Black Friday mania. It has its pros and cons compared to Trezor so YMMV.
- earenndil 9y ago
  Electrum.
matwood 9y ago
Regular markets have circuit breakers [1] that stop trading for a period of time. Coinbase should just define and implement these to let their systems catch up. [1] https://en.wikipedia.org/wiki/Trading_curb https://en.wikipedia.org/wiki/Trading_curb
- cma 9y ago
  Coinbase is unintentionally the circuitbreaker. It crashes every time there is a lot of volatility.
  - sean_anandale 9y ago
    That is insane. Traders make money during periods of high volatility and volume. Defined circuit breakers can be planned for, but unpredictable "lol unavailable gtfo" is unacceptable for serious usage.
mr_spothawk 9y ago
It's so mind-bogglingly fucked... they're freezing the market exactly when the clever investor would like to be buying.
- earenndil 9y ago
  Clever?? Crypto is on its way down right now. You go right ahead and buy, but for everyone else I recommend you SELL.
  - adjkant 9y ago
    Ethereum: - June 13th: $380 - July 17th: $185 - August 31st: $389 - December 16th: $700+ 50% or more swings are all too common. I doubt this is the end. While I would love to see the crash happen sooner than later, I think the percentage of traders that would sell at the signs of a 25% drop or more is still too low. You won't see the big crash until more of the general population is in. After this crash, that still could be a ways off sadly as they back out only to enter a few months later.
egypturnash 9y ago
BTC: peaked just shy of $20k, now in freefall to where it was around the beginning of the month, maybe further. BCH: peaked around "$4k" (if we ignore the $8k that Coinbase was briefly showing in the first few hours of having it publicly available to trade there), dropping back down towards the ~$1-1.5k it was at beforehand. Pumped. Dumped. Done.
mv4 9y ago
Secret of success: buy low, sell high. Unless you are a Coinbase customer (because they will selective disable your ability to act when prices move quickly). I've witnessed it at least a dozen time personally, and stopped trading altogether. Seriously though, the way Coinbase/GDAX has been acting recently can't be attributed to scalability issues. These patterns seem to have a good dose of human decision making in them.
mancerayder 9y ago
Dear Coinbase, Why in the world do you keep signing up new customers if you don't have the capacity to hold them? All aboard, yet the ship sinks due to the passenger load. That's both absurd and preventable.
- mancerayder 9y ago
  AND cue the innumerable HN comments about how we need to feel sympathy for startup 'growing pains.' Coinbase has people's cash, hard cash, and stored value, it's not a software as a service startup that got wildly too popular. It's not growing pains, it's greed and/or incompetence.
Canada 9y ago
Is coinbase suspending withdrawal to other wallets as well as trading?
Sagarkumar 9y ago
Hay day Internet game 6 but how to hack possible 6 game please help

135 points by smoser 9y ago

> "Investigating - All buys and sells have been temporarily disabled. We are working on a fix and apologize for any inconvenience," Coinbase said on its status website at 11:11 a.m., ET. What exactly is broken that needs to be fixed? Is there just a ton of trading volume and their system cant keep up ? Edit: I ask because the headline just says that prices are falling quickly and so Coinbase halted trading. This sounds a lot like a circuit breaker but then you read the article to find out something is actually broken. I'm really curious to know what the symptoms are of whatever is broken. Are trades taking too long to execute? Are people being fulfilled at prices different than they were quoted? What is actually happening?

cevn 9y ago
They go down practically every time there's a lot of volume. Not sure if they have publicly addressed what sort of infrastructure problems they're having though.
- frgtpsswrdlame 9y ago
  Have they gone down when the price is surging upward? I only ever see them going offline when the price goes down but I may have missed something.
  - ISL 9y ago
    Volume is likely to be higher when the price is getting hammered. Panic, when it occurs, is more acute than ebullience.
    - akhatri_aus 9y ago
      Actually with volume its happened both ways. You can easily see from public data that volume doesn't only go mad when price is being hammered.
  - mrgordon 9y ago
    Yes the site always crashes under load
  - mhluongo 9y ago
    Just before the first futures it was surging and they went down. But anecdotally it does seem to happen more on the ride down
api 9y ago
If it's anything else such as allowing insiders to exit before a crash really takes hold, then people are going to jail.
- tonyjstark 9y ago
  Why? Are there regulations in place that forbid coinbase to halt their service? This is not meant to be sarcastic, just wondering if there are laws in place even for unregulated markets like Bitcoin.
  - mtgx 9y ago
    Do you really think it matters? Nobody touched the bankers over the financial crisis because they didn't want to touch them, not because nothing "illegal" was going on. Holder and Obama said it themselves that going after them "would hurt the economy". That was their justification for not prosecuting people. Meanwhile they added 13 bogus charges against Aaron Swartz with a maximum sentence of 35 years for making some documents that were already internally public at the MIT, available to everyone. If the gov wants to make an example out of Coinbase, especially after they put up a fight in the SEC case, then they will.
bhouston 9y ago
I did predict a few weeks ago that if things fall quickly, the systems will do down and people will not be able to sell: https://news.ycombinator.com/item?id=15869668 https://news.ycombinator.com/item?id=15869668
Klathmon 9y ago
I have heard that since coinbase keeps all but 2% of their crypto assets in "cold storage" (offline storage that requires a physical trip to somewhere to spend), there are semi-frequent times where their "hot wallet" runs out of money, and they need to go and retrieve it from cold storage in order to continue. Naturally this would happen when there are large spikes in usage (which happen during swings in price) and people are trying to move cryptocurrencies out of coinbase.
- mancerayder 9y ago
  So the latency are people's feet rapidly shuffling to another physical location? That doesn't make a good story for the convenience and transfer speeds of some of this technology. It feels like they're protecting prices or their capital reserves?

blhack 9y ago

There is something that feels extremely fishy to me about what has happened at coinbase over the last few days. For years I've told people to just store their coins on coinbase. I've been a big fan of their "vaults", and I've been saying that they are the shining beacon of legitimacy in this whole thing. I honestly don't know that I still agree with that. This whole rollout of BCH has made me honestly start questioning if I can trust coinbase anymore. I expect stuff like this from sketchy exchanges like what btc-e was, but not coinbase. That makes me really sad, since they were (still are, for now) such an incredible success story. I think there is going to be a lot of regulation coming and I'm not entirely sure that that is a good thing. It makes me pause for the same reason I wouldn't be sure that regulators telling me what webservers or programming languages I'm allowed to use would be a good thing. I really hope all of the "never keep anything on an exchange!" people aren't proven right again by coinbase of all people.

wu-ikkyu 9y ago
What advantages are there to storing BTC on Coinbase vs. your own wallet
- minimaxir 9y ago
  User experience, which is important when you're trying to appeal to non-techies, like the ones fueling the Bitcoin spike in the first place.
  - sdenton4 9y ago
    Just remember that "everything was great until the normies arrived" is equivalent to "our shit didn't scale well."
- blhack 9y ago
  A few days ago it felt so much easier to answer this question, haha. Coinbase puts a lot of work and effort into their security models. Storing coins yourself means that you now have to: 1) Physically secure your private key 2) Secure the machine that you use to interact with that private key 3) Ensure that that private key was generated in a secure way 4) Ensure that the ways that you interact with that private key don't cause any problems. etc. Storing your own keys is a bet that you are better at security than coinbase's team. That's not a bet I necessarily want to make.

deleted 9y ago

[deleted]

m3kw9 9y ago

The issue with this type of circuit breaker is that there is really no information to let people absorb and calm themselves. When you resume the trade people will still be clueless on why prices moved that way and resume their selling

chollida1 9y ago

Coinbase does a number of things that seem strange from a market perspective. There doesn't appear to be an auction to open/close or restart. Instead they seem to lock their markets and allow post only orders. The other things this screams is that 1) stop loss orders are useless in volatile markets. I've harped on this alot from the US Cash Equities side but it appears to be equally valid. YOu'll only end up getting filled at te worst possible price and miss the inevitable market rebound. 2) Coming from 1) Don't use leverage, you'll get your face ripped off one of these days due to volatility and you'll be asked to submit more margin just when you can least afford to and possibly be liquidated at the bottom.

ISL 9y ago
In a recent thread, stop-loss limit orders were mentioned, which would appear to address the bad-fill concern, to an extent.
- chollida1 9y ago
  as far as I'm away they don't have them yet.
  - makomk 9y ago
    They're hidden under the "advanced" button when placing a stop-loss order. GDAX (the exchange side of Coinbase) actually have quite a plethora of order types... though they don't seem to let you change the time in force for the resulting limit order when the stop-loss triggers, for whatever reason.
dahdum 9y ago
They lock, other than scaling issues, because of liquidity. Bitcoin cash opened with a thin market and ran up to $9,500 in 4 minutes before they halted the market. Was still trading at ~$3k elsewhere at the time. An open/close or restart isn't needed because all assets are being heavily traded elsewhere. If they switch to post only the arb bots will fill their book over time. Leverage will rip your face off.

smaili 9y ago

Why is it they always seem to go down during times of sudden surges and dips? It almost feels like they’re trying to control the market of their platform rather than let it play out. It may indeed just be infrastructure but given the company’s age and decent amount of funding they have now, can scaling really be at play here?

gnicholas 9y ago
I have wondered this also. Coinbase clearly benefits from BTC and other cryptocurrency being "a thing", and rising prices help that happen. If the price of BTC that market watchers and news orgs quote is impacted heavily by the price on Coinbase, then their actions could have an outsize impact on the overall trend. I would be curious to hear from folks savvier than me about suspicions like this. EDIT: wondering why this is downvoted — I make a conjecture and then openly ask for perspectives of those who are more educated on these matters. If you disagree, responding would be helpful. We downvote things not because we disagree but because we think it doesn't add to the discourse.
mattbeckman 9y ago
Yes. Consider that the ramp up in Bitcoin has been happening since June. I recall they were adding 50,000 accounts per day. Suddenly, all the new folks that haven't experienced a bloodbath before are all trying to jump on and sell. I'm not surprised at all, really.
not_kurt_godel 9y ago
> It almost feels like they’re trying to control the market of their platform rather than let it play out. No, no, no, you see - that's the free market at work. Can't you see that everyone will simply pick another exchange and scammy practices like this will be evolutionarily eliminated? /s

randomerr 9y ago

Anyone remember this story from a few days ago? I think the insider trading has hit it's dump phase. Pump and Dump? Coinbase Suspends Bitcoin Cash, Investigates Insider Trading https://www.financemagnates.com/cryptocurrency/news/coinbase-suspends-bitcoin-cash-investigate-insider-trading/ https://www.financemagnates.com/cryptocurrency/news/coinbase...

thisisit 9y ago

It seems Coinbase's go to strategy every time markets are volatile. In case people are wondering why is this a recurring problem - this simply perils of Market Making in a volatile market. As a market maker for customer orders Coinbase needs to fulfill both sides. So to make money they buy from customers at low price and sell back at a high price. So they are collecting spread between bid and ask to make money. But what happens if the market moves rapidly in one direction? They end up selling low and buying high. So, they need to reset the market making algorithm. Or shutdown the site for a "fix", long enough that the volatility comes back in their range.

ethbro 9y ago
I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency? Seems like anyone doing so would inevitably get fleeced.
- Blackthorn 9y ago
  > I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency? A large spread.
  - ethbro 9y ago
    Hmm. So are market makers only ever effecting instantaneous matches? I was under the impression they often held some portion of the asset between buy-sell or sell-buy in order to increase liquidity. (Which would explain why they like HFT, as anything that boosts trade frequency would decrease their exposure)
    - Blackthorn 9y ago
      They do hold underlying and have to hedge their risk in various ways. A large spread helps a lot.
qeternity 9y ago

snissn 9y ago

Coin base has scaled too quickly they really should limit their user sign ups until they can get their support queue under control

psyc 9y ago

I’m getting pretty tired of playing whack a mole with these wretched exchanges. I recently left the dumpster fire at Kraken, only to sign up at, yep, Coinbase. Oh well. On to Bitstamp or Gemini I suppose.

thinkmassive 9y ago
You might want to give Binance a try. No affiliation, it just came recommended to me from some successful traders I’ve met when the topic of reliable exchanges came up.
- alexanat 9y ago
  As a crypto trader Binance is where I do business. Their PC app is phenomenal for the most part, doesn't lag out like a lot of other exchange I've used.
cmurf 9y ago
A friend just bought Ripple on Bitstamp and it's taking upwards of two weeks to verify an account? I can physically walk to a bank and get foreign currency in person 1000x faster than this. I think all of this is speculation and hype, and only a small percent of people now have a use case met by these products.

popz41 9y ago

Move your coins over to GDAX, their sister company. When Coinbase halts trading, GDAX is usually fine.

mr_spothawk 9y ago
^^ this has not been my experience
makomk 9y ago
GDAX shut down trading a few minutes ago, unfortunately. Performance issues with the REST API apparently. I think they've been seeing a lot of volume these past few hours.

ramphastidae 9y ago

I ignored all the warnings about Coinbase at my own peril. I tried to move my coins out of the exchange about 48 hours ago (shortly before the crash) but I made the mistake of purchasing a new phone about a week ago and not switching over my 2FA keys in Google Authenticator. They have an account recovery process in place but it takes "48-72 hours" to complete. I had to re-submit my ID, which was confirmed as verified, but now I just have to sit around and pray that they come through and the process is completed over a holiday weekend. Obviously partially my fault for not transferring my 2FA keys, but with all the stories of customer service being unresponsive for weeks, I'm not holding my breath.

cma 9y ago
That actually seems like a good thing. You want caution over a user failing 2FA. If you lost your 2FA keys despite knowing their response times imagine how bad it would have been if you mis-managed your wallet and just lost everything entirely.
Fnoord 9y ago
Sounds like you got yourself an expensive phone. Hope it was worth it!

peacelp 9y ago

How is bitcoin supply finite, if it keeps hard-forking.

BallinBige 9y ago
doesn't the fork create a new coin?
- adjkant 9y ago
  Correct.

peacelp 9y ago

How is bitcoin supply finite, if it can hard fork?

quickben 9y ago
Forks aren't Bitcoin
danield9tqh 9y ago
Like saying how is gold supply finite if you can break a piece of gold in half. When Bitcoin forks the value is split between the two forks. If the market cap of Bitcoin before the fork is $10 Billion, the combined market cap of both sides of the fork afterwards will still be $10 Billion. There are double the number of coins because of the fork but now each person who had one coin has two and each coin is worth a fraction of what is was before. It's an increase in supply but an increase that is perfectly distributed among the previous holders.
- adjkant 9y ago
  The split value is in theory but didn't seem to follow in practice. Anyone can create a fork, and the market will not be that efficient, even in the long run. I don't think the metaphor works for that reason. Simply, forking makes a coin that is not Bitcoin, and people can value it however they like. The only question is why they would value it at all. There are usually technical differences in forks that people believe are better.
- alexanat 9y ago
  A better analogy in my mind is that Bitcoin can be gold coin, and a fork is someone making cardboard coin, coloring them gold, and then calling it a type of bitcoin. Forks are completely separate from bitcoin and are worth nowhere near as much.

sowbug 9y ago

Good opportunity for the old-timers who were daytrading in the 1990s to tell their stories of Datek, E*Trade, Ameritrade, Schwab, etc., failing during peak NASDAQ/NYSE markets. You know who you are -- drinking coffee and staring at multiple monitors while in your boxer shorts at home. 6:29am Pacific, watching Ron Insana and Maria Bartiromo on CNBC... This has all happened before. It will all happen again.

stygiansonic 9y ago
As I’ve said before, watching cryptocurrency markets evolve is like watching the entire history of financial markets being replayed as painful lessons are relearned.
- CamelCaseName 9y ago
  Is there anywhere I can get a full rundown of the modern evolution of finance? I have a degree in it yet it all still send fragmented.
  - sowbug 9y ago
    I don't have an answer for you, but Reminiscences of a Stock Operator is required reading for anyone interested in the history of securities markets. It's fictionalized autobiography of a legendary trader in the 1920s. It could have been written yesterday or a thousand years ago. https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Lef%C3%A8vre/dp/0471770884 https://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Le...
- flycaliguy 9y ago
  Maybe Bitcoin was created by an A.I. to teach us all a lesson...

NelsonMinar 9y ago

Coinbase is the one exchange that's looked like a legitimate business. Between insider trading and execution problems, it's pretty alarming. (Who am I kidding? Clearly this is actually good for Bitcoin somehow.) Worth noting Coinbase has two kinds of systems risk. There's the technical risk of writing and running code correctly. And there's also the financial risk of them making the market in Bitcoin. Both of those tasks have gotten a whole lot harder recently as Bitcoin transactions have gotten slower and more expensive. Turns out building a global currency with a global 7 transaction / second limit may not be a good idea.

aviv 9y ago
I think their biggest risk is a compromised/rogue employee.

draw_down 9y ago

There’s a shocker.

idibidiart 9y ago

Coinbase.gov

sctb 9y ago
We've asked you several times already to please start commenting civilly and substantively, so we've banned the account. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

sathackr 9y ago

If you have USD in Coinbase that you'd like to buy with right now, you can use your Coinbase account at GDAX and transfer USD instantly to GDAX. Trades are working fine at GDAX. Pretty sure GDAX is also owned by Coinbase. I did it just now.

spraak 9y ago

It's telling to me about the hype bubble that this article is coming from CNBC.

esaym 9y ago

So if we shouldn't be leaving our coins on coinbase, where do we leave them? A full wallet is not an option for many of us. I don't want to have to download 100's of gigs of data just to store my coins... I even tried to move from bitcoin to etherum since I thought that wallet might be smaller. And it was, but after leaving it running for 2 days it still had a ways to go and all the IO it was doing was really trashing my SSD. At that point I looked into hot wallets like jaxx. But then on /r/jaxx, there were many people complaining about using jaxx only to have had their private keys stolen. So at that point I just left everything on coinbase :/ Is there any decent hot wallet out there or anything else?

cdancette 9y ago
Why don't you use a paper wallet or just keep your private key on a hard drive? Are you exchanging your bitcoins often?
tokenizerrr 9y ago
Electrum, Mycelium
mr_spothawk 9y ago
order a Trezor and wait for it to arrive in February... until then, breath deeply.
- ghostbrainalpha 9y ago
  If you pay $20 extra, they will deliver Trezor's now in 3 days.
- Fnoord 9y ago
  Ledger Nano S took ~4 days to arrive from France to The Netherlands. During Black Friday mania. It has its pros and cons compared to Trezor so YMMV.
earenndil 9y ago
Electrum.

matwood 9y ago

Regular markets have circuit breakers [1] that stop trading for a period of time. Coinbase should just define and implement these to let their systems catch up. [1] https://en.wikipedia.org/wiki/Trading_curb https://en.wikipedia.org/wiki/Trading_curb

cma 9y ago
Coinbase is unintentionally the circuitbreaker. It crashes every time there is a lot of volatility.
- sean_anandale 9y ago
  That is insane. Traders make money during periods of high volatility and volume. Defined circuit breakers can be planned for, but unpredictable "lol unavailable gtfo" is unacceptable for serious usage.

mr_spothawk 9y ago

It's so mind-bogglingly fucked... they're freezing the market exactly when the clever investor would like to be buying.

earenndil 9y ago
Clever?? Crypto is on its way down right now. You go right ahead and buy, but for everyone else I recommend you SELL.
- adjkant 9y ago
  Ethereum: - June 13th: $380 - July 17th: $185 - August 31st: $389 - December 16th: $700+ 50% or more swings are all too common. I doubt this is the end. While I would love to see the crash happen sooner than later, I think the percentage of traders that would sell at the signs of a 25% drop or more is still too low. You won't see the big crash until more of the general population is in. After this crash, that still could be a ways off sadly as they back out only to enter a few months later.

egypturnash 9y ago

BTC: peaked just shy of $20k, now in freefall to where it was around the beginning of the month, maybe further. BCH: peaked around "$4k" (if we ignore the $8k that Coinbase was briefly showing in the first few hours of having it publicly available to trade there), dropping back down towards the ~$1-1.5k it was at beforehand. Pumped. Dumped. Done.

mv4 9y ago

Secret of success: buy low, sell high. Unless you are a Coinbase customer (because they will selective disable your ability to act when prices move quickly). I've witnessed it at least a dozen time personally, and stopped trading altogether. Seriously though, the way Coinbase/GDAX has been acting recently can't be attributed to scalability issues. These patterns seem to have a good dose of human decision making in them.

mancerayder 9y ago

Dear Coinbase, Why in the world do you keep signing up new customers if you don't have the capacity to hold them? All aboard, yet the ship sinks due to the passenger load. That's both absurd and preventable.

mancerayder 9y ago
AND cue the innumerable HN comments about how we need to feel sympathy for startup 'growing pains.' Coinbase has people's cash, hard cash, and stored value, it's not a software as a service startup that got wildly too popular. It's not growing pains, it's greed and/or incompetence.

Canada 9y ago

Is coinbase suspending withdrawal to other wallets as well as trading?

Sagarkumar 9y ago

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