Increased Bitcoin Demand Puts a Strain on Global Exchanges
May 25th was a hectic day in Bitcoin-land as trade volumes hit an all-time high of over $2.4 billion during the day. Many traders are making moves to accumulate profits by day trading or utilizing intra-range strategies. Although quite a few exchanges have been having a difficult time dealing with the demand, Denial-of-Service (DDoS) attacks, increased customer support, and even keeping their website online.
This includes well-known exchanges like Coinbase, Kraken, and Bitstamp as the companies have issued statements, and across forums, customers are complaining. Last week Bitstamp explained to its clients that increased demand has put a lot of pressure on the company.
“As digital currencies continue to gain in popularity, the increase in the number of new traders on exchanges like ours can exert significant pressure on the customer service team,” details Bitstamp. “Our duty to fulfill our compliance obligations also means that there are limits as to how much of the onboarding process can be automated, which imposes additional demands on our staff.”
Dramatic Increases in Traffic and Trading Volume
The cryptocurrency brokerage service and exchange Coinbase is also dealing with increased trades and new customers. The exchange has been seeing nearly 100,000 new registrants per week and currently services 7.2 million customers.
“The market cap of digital currencies has increased ~50 percent to $91 billion in the past week. As a result, Coinbase has seen a dramatic increase in traffic and trading volume,” the firm told the publication Techcrunch in a statement.
The Coinbase engineering and support teams have been working round the clock to keep up with this unprecedented volume. However, Coinbase.com has suffered a few outages, including degraded performance and deposit/withdrawal delays for some users. We are actively working on resolving these issues and restoring our site to normal performance.
‘100% Uptime is Unrealistic’
Additionally, many of these trading platforms have been suffering through DDoS attacks which have been a common occurrence for exchanges this month. On May 7 the San Francisco-based Kraken exchange experienced a severe DDoS attack dealing with Ethereum trades, which “cascaded margin liquidations on the ETH/USD order book.”
Throughout these moments of frustration, traders believe bitcoin exchanges should guarantee 100 percent uptime. Kraken’s founder and CEO Jesse Powell explains that type of request is unrealistic.
“Unfortunately, this is not realistic at our price point. Even giants like Amazon and Google are not completely immune to DDoS,” Powell stated during the company’s May 7 DDoS attack.
We have already invested a lot in mitigating attacks and we are constantly improving our defenses.
Exchanges See High Prices & Irritable Traders
Trading platforms that are lagging and suffering from lots of customer support request are definitely irritating bitcoin traders. Some are even complaining about charts not working correctly which is not an ideal situation for traders. However, the increased demand has pushed bitcoin’s value way up the price ladder and not too many people are complaining about that. Traders hope that with all the new money flowing into these exchanges they will hire more employees and tighten up their company’s DDoS mitigation defenses.