A fresh high for Bitcoin has left cryptocurrency exchanges crippled again. The sudden surge in Bitcoin prices, followed by a rise in volumes worked like a DDoS attack on some exchanges, causing them to have outages and connectivity issues.
Top exchanges struggle with the demand
Tesla recently announced that it has invested $1.5 billion in Bitcoin because of which traders jumped to the Bitcoin bandwagon yet again. The largest cryptocurrency in the world posted $5,600 in gains in a single day and touched almost $45,000, reaching new all-time highs. The sudden rise in transaction volumes stunned the systems of many crypto exchanges. Both volume and price of Bitcoin kept increasing which worked like a DDoS attack on the systems.
Top exchanges like Binance, Coinbase, Kraken, and Gemini faced connectivity issues. The support pages of all companies filed incident reports and talked about technical issues on their platform. Binance suspended withdrawals briefly while Kraken temporarily suspended new account onboarding. Both the platforms announced that they have now resolved their problems and released a fix.
Bitcoin’s gain is exchange’s loss
In 2020, the stay-at-home orders led to increasing in trading figures across equities, indices, and even digital currencies. The crypto market was specifically affected because of the increasing institutional activity in the region. Top institutional investors like MicroStrategy revealed multi-billion-dollar investments in Bitcoin which led to an unprecedented price rise towards the end of 2020 and early 2021.
During this time, Bitcoin’s price reached double its previous all-time highs of $20,000. The coin gained about 20% because of the Tesla investment alone, suggesting faith in the company’s decision to back the coin. Cryptocurrency exchanges have faced several unexpected and sudden surges in trading volumes in the past year, which has made outages very common.
Users are complaining about not being able to log into their accounts or facing slow connectivity during peak volumes which makes them miss out on profits.