The June 1 outage happened during the surge of traffic as Bitcoin was trying to push through the $10,000 resistance level. Similar to the BitMex blackout a few months ago, this caused much frustration among its user base. A few days later, one of its most famous users, “Black Swan” author Nassim Taleb, quit the exchange.
Coinbase net Bitcoin flows. Source: Glassnode.
Users punishing Coinbase?
June 7, Coinbase users withdrew 22,000 more Bitcoins than they deposited — worth $214 million. According to Glassnode data, only once in history did Coinbase see a greater net withdrawal — July 28 2017, when the outflow was 22,500 BTC. The price at the time, however, was $2,785. Thus, denominated in dollars, that was a much more modest event, with only $63 million worth of Bitcoin withdrawn from the exchange.
Bitcoin balance on Coinbase and other exchanges. Source: Glassnode.
Coinbase still holds close to a million Bitcoin, more than any other exchange. Thus, this latest incident may have an insignificant impact on its bottom line. Nonetheless, keeping in mind how BitMex lost its leadership position, Coinbase would be well-advised to fix its scalability woes in order not to alienate its users any further — black swans appear when you least expect them.