The Fall from Grace: A Brief Overview
In the wild and wacky world of cryptocurrency, even the giants can trip over their own feet. Coinbase, a name that’s practically synonymous with crypto in the U.S., recently learned this the hard way. Thanks to a rather spectacular Bitcoin price blunder back in October 2019, Coinbase slipped down the rankings of crypto exchanges, missing out on that coveted top position.
The $9,260 to $9,055 Rollercoaster
Picture this: it’s October 31, 2019. Most people are celebrating Halloween, but for Coinbase Pro, it was more like a horror show. A glitch in their system led to the deletion of stop-loss orders just as Bitcoin decided to play ‘hot potato’ — dropping from $9,260 to $9,055 in a heartbeat. It’s like the cryptocurrency version of stepping on a banana peel. CryptoCompare, a British analytics firm, pointed out that if it weren’t for this mishap, Coinbase would have still been basking in the glory of the top ranking. Ouch!
A Glitch That Echoes Through Time
But wait, this isn’t the first time Coinbase has made headlines for price glitches. Back in 2017, the exchange faced scrutiny from the Commodity Futures Trading Commission for a similar incident involving Ether on its GDAX platform. Ether, which was trading around $317, suddenly nosedived to just ten cents. Talk about giving investors a heart attack! Glitches seem to be like that friend who keeps ruining parties, and Coinbase is on a first-name basis with them.
The New Rankings are In!
Fast forward to February 12, 2020. CryptoCompare released an updated Exchange Benchmark that reshuffled the deck. U.S.-based ItBit took the top spot this time around — and if you thought coming in first was a big deal, just wait till you hear that it was ranked 20th by 24-hour volume at the time! Meanwhile, Gemini slid down to second place, with Coinbase sitting comfortably in third. The world of crypto exchanges is clearly on a rollercoaster ride, and nobody has their seatbelt securely fastened.
What Lies Ahead for Crypto Exchanges?
With a staggering 159 exchanges analyzed, CryptoCompare’s Benchmark highlights not just the successes but also the pitfalls of the crypto world. Shockingly, only 16% of these exchanges hold over 95% of their funds in cold storage. And only 4% of them offer some form of crypto insurance. Yikes! Looks like the security stakes are higher than a cat on a roof. While exchanges in the U.S., Luxembourg, Japan, and South Korea tend to be seen as lower-risk, the lessons learned from Coinbase’s experience remind us that in the unpredictable landscape of digital currency, caution isn’t just advisable — it’s essential.
