Heavy online traffic
Yesterday, millions of users were locked out of buying and selling cryptocurrencies. The “all-time high traffic”, “technical issues” and “undergoing maintenance” reasons were all invoked by cryptocurrencies exchange platforms.
The incident slowed down the total market capitalization growth pace, resulting in a slump in Bitcoin prices as compared to USD.
Coinbase, by far the largest digital wallet, and a landing website for beginners, begun by crashing yesterday morning, November 29th.
Even Kraken was impossible to access. The very few times the website responded, it would either send a “feature disabled” error message, or a “504 gateway time-out” one, each time we would click on the register button.
We also tried to set up a new wallet on Tether (USDT), but that was impossible as well. The website showed a “Registrations are temporarily offline” message. No official statement was disclosed as of the press time.
Business Insider reported that even the Winklevoss twins’ exchange, Gemini, crashed as well.
During a Bloomberg interview (Markets AM with Pimm Fox and Lisa Abramowicz session), Chris Burniske, Partner at Placeholder and Advisor to ARK Investment Management was invited to talk Bitcoin and whether there is real money flowing into the asset class, or a mass speculation.
He replied: “[..] We are seeing a lot of activity. And I think that to quantify that activity, it’s best to look at how much new FIAT currency is flowing through the bitcoin ecosystem Versus how much the network value (Market Capitalization [Editor’s note]) is increasing”.
He added: “if you look at Coinbase, one of the largest retail platforms where people can buy Bitcoin. They are adding roughly 125,000 new users a day. If you assume [..] that’s one-fourth of the global totals, then you will have roughly 500,000 new Bitcoin users a day”.
Red, is the new black
After a 48 hours period of euphoria among the cryptocurrencies world enthusiasts, during which Bitcoin surged forward through the $10,000 milestone, the digital currency went up to over $11,500 yesterday November 29th, before crashing down to around $9,000. Bitcoin is down by 14% in a 24 hours period, highlighting its extreme volatility.
Yesterday around 2 am UTC, the crypto-coin price tracker coinmarketcap, showed a negative 24 hours change in prices. This was not only for Bitcoin but for 8 out of the 10 most valuable Altcoins in terms of total market capitalizations. Even the 3.51% increase in Bitcoin’s prices, was due to earlier transaction volume, before the collective crash of exchanges. We tracked the same data 12 hours after, at 2 pm UTC.
The slump in Total market cap and circulating supply is obvious for almost all Altcoins, besides a hyped Cardano, which made it to the top 10, and a couple of less known Digital Currencies (i.e, Peercoin), which most likely underwent a pump and dump kind of scheme.
Besides the slow transaction traffic following the crash of exchanges, yet another reason can explain the slump. Spotted on Telegram discussions over the course of the last year, a lot of investors and amateurs driven by easy and fast earnings, did set the $10,000 milestone, as the day they would sell their Bitcoin assets. In fact, the offer and demand balance was leaning towards offers yesterday, with Bitcoin being highly available to purchase.
Given that most altcoins can only be purchased with Bitcoins, any decrease in Bitcoin’s value would result in a collective crash. Hence the reason behind the “red-dominated” overview of the market capitalizations to this moment.