Coinbase has been facing technical challenges due to increased trading activity in the cryptocurrency market. The exchange has experienced three major outages in less than ten days, leading to widespread criticism and concerns from users.
Matt Hougan, the Chief Investment Officer at Bitwise Asset Management, offered a supportive stance on Coinbase’s ongoing challenges. He drew parallels to other successful tech companies like Facebook, which faced similar growing pains during their early stages of rapid growth.
“Coinbase crashed all the time in past bull markets, yet it still grew like crazy,” Hougan stated on X, formerly known as Twitter. “That’s a theme throughout internet history. Facebook crashed all the time; it still got billions of users.”
Hougan highlighted that the technical issues are primarily impacting retail users, while institutional clients utilizing Coinbase as a custodian for their spot bitcoin ETFs have remained unaffected. He explained that most ETFs trade through multiple over-the-counter counterparties, ensuring ample liquidity across various platforms beyond Coinbase.
Despite Hougan’s optimism, concerns persist regarding Coinbase’s ability to handle the increased demand effectively. The exchange, which did not immediately respond to requests for comment, has faced criticism from industry analysts and users alike, questioning its preparedness for such situations given its financial resources and technological expertise.
As the crypto market continues to evolve and attract mainstream attention, exchanges like Coinbase will face mounting pressure to ensure robust infrastructure and seamless operations to maintain user confidence and drive further adoption.
Also read: Coinbase Challenges SEC’s ‘Empty Chair’ Securities Judgment
