• A surge in Bitcoin’s value caused a technical glitch on Coinbase, displaying incorrect user balances and sparking market panic.
• While the issue was resolved, it briefly impacted Bitcoin’s price but didn’t affect Coinbase’s layer 2 network, Base, which continued to experience growth.

On February 28th, following a significant rise in Bitcoin’s value, numerous Coinbase users reported a concerning situation: their account balances inexplicably dropped to $0. This unexpected glitch left users confused and searching for answers, with many taking to social media platforms like X (formerly Twitter) to express their concerns.

Company acknowledges the issue and assures users

Coinbase acknowledged the technical difficulties and assured users that their assets were safe. The company explained that despite anticipating and preparing for a tenfold increase in traffic, the actual surge triggered by the Bitcoin price hike exceeded expectations. Coinbase CEO Brian Armstrong eventually announced the restoration of the apps.

Also Read:Bitcoin Reaches Two-Year High: Five-Day Rally Fueled by ETPs and Halving Event Nears

Panic and FUD engulf the market

The incident sparked panic and negativity surrounding Coinbase, leading to a temporary dip in the company’s stock price. According to some, even Bitcoin’s price was impacted by the outage. The value of Bitcoin reportedly plummeted by $100 billion in just 15 minutes, seemingly triggered by the Coinbase crash. Between 12:15 PM and 12:30 PM ET, Bitcoin’s price dropped from $64,000 to $59,000, representing a nearly 9% swing. This crash coincided with the widespread network issues faced by Coinbase users. Notably, this sharp decline occurred when Bitcoin was on the verge of reaching a new all-time high, being less than 10% away from the milestone.

Base remains unaffected

Base, the layer 2 network created by Coinbase, remained unfazed by the negative sentiment. The network’s daily active addresses continued to rise, reaching 90,000 at press time. Additionally, the number of daily transactions on the network witnessed an uptick, reaching 406,000. Furthermore, Base performed well within the DeFi sector, with both the total value locked (TVL) and decentralized exchange (DEX) volumes on the network experiencing growth.

This incident highlights the potential impact of technical glitches on the cryptocurrency market, even for established platforms like Coinbase. While the company assures users of their assets’ safety, such occurrences can undoubtedly cause temporary panic and market fluctuations.