back to article Bitcoin exchange Coinbase crashes after Asian buying frenzy

Over the past couple of weeks, the price of Bitcoin has gone up 50 per cent, spiking at over $2,700 per unit on Thursday. Demand has been so great that popular exchange Coinbase has been unable to keep up. "Coinbase has experienced unprecedented traffic and trading volume this week," the exchange warned. "As a result, …

  1. Anonymous Coward
    Anonymous Coward

    Of course its a bubble

    Doubling in price over such a short timeframe is not realistic.

    It is also not something a "currency" should do, especially when the correction inevitably comes and it goes the other way. If I had any I'd sell it all right now and take profits. Even if it has more to rise, timing the top before the bottom drops out it and crashes is pure luck.

    1. Doctor_Wibble

      Re: Of course its a bubble

      It's more like a commodity than a currency, the fact that people take bitcoin in exchange for goods and services is simply a result of it being more convenient than having to figure out what the oranges-to-bananas exchange rate is today.

      Beer, because it is both currency and commodity. The third part of its sacred trinity of purpose is of course being a most wondrous thing to spend quality time with. Also, you don't need to find cupboard space when putting it away.

      1. Anonymous Coward
        Anonymous Coward

        Re: Of course its a bubble

        The conversion of oranges to bananas stills occurs when converting to or from bitcoin but invisible transfers of funds, avoiding paying tax and money laundering rules are a distinct advantage to some purchasers.

        1. shade82000

          Re: Of course its a bubble

          What I find disturbing is the willingness to always focus on the unstable nature of digital currency. I believe it's not going anywhere any time soon and it's here to stay. But I don't think it can be reliably compared to traditional currency because they both fluctuate quite a bit. If you try to mentally stabilise one of them for the purpose of comparison, then the fluctuations in the other one will always be more pronounced.

          The banks must be shitting themselves - every +1 for digital currency equals a -1 for the control the banking sector has. You think they don't know this? You think they don't try to play it to their advantage when something bad happens in the digital world? Of course they do - traditional banking is not there to make your life easier, it is nothing more than a business model and the banker's main objective is maximising their returns. This mostly happens at the expense of the little people with little bank accounts.

          The biggest meltdown in recent history of the traditional banking world happened around 2007 / 2008. It was caused by mass incompetence of those who were supposed to be looking after the currency for you. It wiped beeeellions of the value of currencies all over the planet and we are still recovering from it 10 years later. Why? Because despite being the cause of the meltdown the bankers still want to gain financially in every way possible from the recovery and they can manipulate how long it takes, who pays for it and how much they make from it.

          The biggest meltdown in the digital banking world happened when that guy stole a load of coin from his company. It wiped beeeellions of the value of this currency but it took a year or two to bounce back. Look at the price now.

          So without comparing actual value of the two against each other, which one is really more stable, more trustworthy and a more accurate representation of how the general population really feel about it?

          Yes I'm all for digital currency but we need to focus on how we can use traditional currency less and stop comparing the two against each other. The day we mentally detach from comparing physical items to the value of traditional currency is the day things will start to change. The day we start looking at digital currency in terms of 'how many BTC = a can of Cuke(tm)' or 'how many BTC was my weekly shop' is the day traditional banking really needs to put on a fresh pair of undies. That day will we will see the 'BTC to real world items' value begin to appear stabilised and the 'BTC to pound' value will begin to look really unstable.

    2. Anonymous Coward
      Anonymous Coward

      Re: Of course its a bubble

      Of course its possible to grow at a rapid pace just as its possible to shrink at a rapid pace.

      Just ask anyone living in Zimbabwe.

      Im tired of people shouting "bubble" everytime something shoots up in value.

      Bitcoin brings something tonthe tabke that we have never seen in the financial sector...ever. That is control.

      Regulation and oversight no matter how stringent are not direct control. This is why BTC is crazy volatile. Its like watching a shoal of fish. Its not the same boom bust politically linked backed by fuck all nonesense we're used to.

      The bahaviour you see is crowd wisdom.

      It doesnt take a rocket psychologist to see that.

      Cryptocurrency is not as simple as boom and bust.

      1. Anonymous Coward
        Anonymous Coward

        Re: Of course its a bubble

        "Its not the same boom bust politically linked backed by fuck all nonesense...

        That seems a little over zealous considering that the "boom bust" can be what, anywhere between 20% and 600% inflation, what is wise about that? Maybe bitcoin was an offshoot of a true digital currency years ago, but today its value seems to be dictated more like the next trendy cat video.

        I'm not implying it can't or shouldn't have value, but just that it needs to hit a normalization spot for people to understand that if 1 bitcoin was demonetized, how much value would be lost. After all, everything of its kindred is measured from zero, and with bitcoin, the zero never rests.

        "It is also not something a "currency" should do..." Can't say much to that as I agree with the core of it, but gold, silver and especially copper all do the same (but again, I agree with the sentiment as it's rare).

      2. barbara.hudson

        Re: Of course its a bubble

        Crowd wisdom? Is that the same crowd wisdom that gave us tulip mania, the stock market crash that started the depression, the dot-bomb bubble, the housing bubble, and Trump?

    3. Version 1.0 Silver badge

      Re: Of course its a bubble

      It's a bubble for sure - I can remember the Gold Bubble in the 70's when an ounce went up to 100 quid! ... obviously sell at that price, a total bubble - it's never be that high again.

  2. Tromos

    "Legal tender"?

    There's quite a difference between legal tender and simply legal. Somehow I don't see the local corner shop being compelled to accept Bitcoin for a packet of crisps for some time to come (if ever).

    1. Charles 9

      Re: "Legal tender"?

      Legal tender doesn't apply to pure sales since the seller can always walk away. The legal importance is when it comes to DEBTS.

    2. Nattrash

      Re: "Legal tender"?

      Then again, take large denomination legal tender to for example the corner shop or petrol station and try to pay with it...

      It's all about trust, isn't it? And with negative interest, talk about getting rid of cash, banks having the opportunity of creating digital money out of air without backup (e.g. gold standard decoupling), I have the feeling the acceptance gap is a lot smaller than we think or "people" would like us to believe...

    3. This post has been deleted by its author

      1. Anonymous Coward
        Anonymous Coward

        Re: "Legal tender"?

        But Bitcoin just a commodity, based on people being willing to accept it. Just like gold and so forth. There is no magic that makes it better than fiat currency, unless that fiat currency happens to be in hyperinflation (which is never something that just sneaks up on you)

        It has such wild swings in value that it would be stupid to sit on it as if it was "kept under a mattress" because even though sitting on it for the past year would have been great, sitting on it another year has a good chance of proving disastrous. There's nothing like the "negative inflation" of having your stash lose half its value, which Bitcoin is probably not that unlikely to do given how much it is gone up in such a short time.

        Just wait for the next time a Bitcoin exchange is hacked, or the next major malware is one that grubs around PCs looking for wallets to empty. Having my money in a bank is an advantage in my book, because if the bank is robbed or someone gets access to my bank account I don't lose everything - in fact I don't lose anything at all. With Bitcoin, you are dependent on the security of the exchange you use, and Microsoft's or Apple's or Redhat's ability to secure the OS of the PC you use. I'm sure Reg readers feel they are immune to such things, but while you may be better able to keep your bitcoins secure than the average person, you still stand a much greater chance of losing everything than you do if you keep your money in a bank.

      2. Brian Miller

        Re: "Legal tender"?

        Cryptocurrencies are fiat currencies, ...

        All currencies are actually fiat currencies. All value is assigned according to perception. Mercury is rarer than gold, but has a lower monetary value. The price of diamonds is artificially inflated due to a global monopoly by De Beers.

        1. Richard 12 Silver badge

          Re: "Legal tender"?

          Nope, commodity-backed and fiat are strictly different.

          That's like saying floats and integers are the same because they're both numbers.

          Commodity-backed and fiat behave differently. Bitcoin is neither of these, though I suppose it has more in common with commodity-backed as there is a fixed maximum number.

          Or perhaps more in common with pyramid schemes, as early adopters got lots of free btc while these days you can't get any without specialist hardware.

          1. Alan Brown Silver badge

            Re: "Legal tender"?

            If Mr Sakamoto should ever cash in a single one of his BC, the market would crash overnight. It's a very interesting pyramid scheme when you look at it that way.

  3. Anonymous Coward
    Anonymous Coward

    Ahhhh bitcoin <3

    I had hundreds at one point. If I'd sat on them all, rather than slowly cashing them out as the price rose, I'd be a millionaire now. Guess I was ambivalent about their future... confident enough to buy a load, but unsure enough to trickle sell them rather than holding for the long run. Still made me a few hundred k, which isn't bad for fake scam internet tulipomania bubble drugcoins.

    Down to my last 25... reckon I'll hold onto them, perhaps they'll yet hit £40k. He who dares, Rodders... this time next year...

    1. razorfishsl

      Re: Ahhhh bitcoin <3

      sell them out.

      re-buy when it bottoms out,

      I'm still clearing coins i mined in 2010 and beyond.

      1. SqueakyDuckPants

        Re: Ahhhh bitcoin <3

        Holds for seven years; tells others to *sell right now*.

  4. Charles 9

    Ah, but keep receipts. Above certain levels, these kinds of transactions become taxable events. And Coinbase is registered to various governments.

    1. Anonymous Coward
      Anonymous Coward

      They are taxable events at any level in the US. It is taxed as a commodity just like gold. They probably don't have much of a way to track bitcoin transactions, but as soon as you exchange them for something else, they are only limited by their ability to track that 'something else' (i.e. dollars or other currencies very bad, gold, art or other commodities held overseas potentially bad, overseas hookers and blow no problem)

      1. Charles 9

        Since I used to use Counbase, last I checked they don't really care until it passes a floor value. Otherwise, Counbase would be obligated to submit a tax form (1099-B, I think) for you (Counbase is a registered exchange in the US, permitting them access to banks).

        1. Anonymous Coward
          Anonymous Coward

          That's how it is everywhere, there's a minimum dollar limit before forms have to be submitted on your behalf to the IRS, to reduce the paperwork burden for small amounts. You are still liable for taxes even if you make only a penny of profit, but it is more difficult for the IRS to find out (unless you are audited, and for whatever reason they put you in the "stick a microscope up his ass" category)

  5. FlamingDeath Silver badge

    Cryptocurrency = control

    I don't want to sound like a complete pessimist even if I am (is 37 to early age for cynicism?), but in my view crypto currencies represent a form of control, where you could potentially be denied access to it should it become the only available option in the future. The inception and creation of bitcoin is a bit of a mystery, and that should raise your suspicion of it.

    1. Pascal Monett Silver badge

      Re: Cryptocurrency = control

      "The inception and creation of bitcoin is a bit of a mystery, and that should raise your suspicion of it."

      Bitcoin is open source. If you have suspicions concerning how it works, you can check the code.

      Personally my problem with Bitcoin is not its creation or even how it works, it has much more to do with how little I trust private exchanges to manage wallets properly and professionally.

      1. Anonymous Coward
        Anonymous Coward

        Re: Cryptocurrency = control

        That's no different from saying you don't trust banks to manage your money.

        With both currencies you can either leave your stash in their hands or you withdraw it and keep it in a private wallet where they no longer have access to it.

        Again with both methods you can also leave your wallet unprotected and vulnerable to theft but the responsibility for that is on you.

  6. Mage Silver badge


    Victorian Railways.

    Trollop: "The way we live now".

    I'm also reminded of Anglo Irish Bank (which wasn't a bank).

  7. GrapeBunch


    I'm super naive about these things. But won't the crims and terrorists who are rumoured to own this cryptocurrency be encouraged to sell their holdings, receiving clean yen or wan or remnimbi or whatever as a fee for legitimizing the marketplace, thank you very much imperialist establishment, and then create a new cryptocurrency? Isn't Bitcoin becoming stodgy and saturated, even a tiny bit (oops, unintentional pun)? They are the new Bankers. Is it only Bitcoin that's being legitimized in Japan? If it is that sort of favoritism, perhaps that implies that there is something (in the realm of trackability) about the particular cryptocurrency Bitcoin that the person in the street would like to know.

    Bitcoin intrigued me, but I never got any, perhaps I'm too accustomed to writing cheques and paying bills automatically with no service charges. Too much of that everyday banking convenience to see the bigger picture.

    1. Charles 9

      Re: Naive

      Those countries permit Bitcoin trading because they also regulate the ways they are exchanged. As long as they know the exchange transactions, they're no different from other currency exchanges. The US tolerates Bitcoin as well because they have means of managing the exchanges.

  8. Richard 12 Silver badge

    What happens as the limit is reached?

    As I understand it, Bitcoin is deliberately designed to "run out" with a hard maximum on the number that can ever exist.

    It can't be created like fiat currency - by being lent to borrowers - instead it's created by the payment processors (updating the blockchain to confirm transactions).

    So as the creation rate falls, there will be fewer payment processors, and eventually none when it costs more in energy and hardware than they get paid.

    So if I understand correctly, it must burst as the end hits - nobody can pay anyone any Bitcoin because nobody is confirming the payments.

    Are there other ways that the processors get paid?

    1. shade82000

      Re: What happens as the limit is reached?

      I think that the times I sell BTC in exchange for cash, there is a tiny fee (percentage or flat rate) for doing the transaction.

      That doesn't apply to regular BTC wallet-to-wallet payments though - from a consumer perspective, payments are direct and there is no payment processor or fee as such. You send the BTC direct to the recipient's wallet so there is no way for a middleman to take a cut during the transaction, unless you purposely transfer it to the wallet of a middleman who then sends it on to the recipient, but that would be two transactions.

      The middleman part is the bit that banks and various governments don't like because they can't control the flow of money. The calculations the miners are doing are basically confirming that nothing has messed with the transaction during the process.

      The fee that the miners get is only increased by mining more efficiently and has no immediate impact on the amount of BTC you paid for the pizza.

      Also, don't overlook that hardware becomes more efficient over time and the ecosystem kind of self-regulates in that respect. Ignoring the fact that it would take a lot longer, and you wouldn't be paid anything in return, imagine how much more electricity would be required to do the same number of actual calculations on 500 old desktop machines in a warehouse, compared to 500 ASIC miners built last week. From that point things will only get more efficient.

    2. Version 1.0 Silver badge

      Re: What happens as the limit is reached?

      Eventually the fees for confirming payments will rise somewhat but by that time (in theory at least) there will be so many payments that confirming payments will be profitable, at least for the larger centers (slushpool is currently running at 240Phs).

      In this way it's no different from CC payments, someone, somewhere has to issue a confirmation every time you use your credit card - with a credit card this is usually a dual process, authorization by the credit card company, and then payment by the bank.

      There's always a backend - the difference with Btc is that it's public and distributed.

  9. Anonymous Coward
    Anonymous Coward

    "The bitcoin price has gone up and down like the Assyrian Empire."

    As an Assyrian I find that offensive.

    1. Version 1.0 Silver badge

      "As an Assyrian I find that offensive."

      OK, I'll go 70's on you; The bitcoin price has gone up and down like my right arm in the pub. Relax, it's a joke - every empire goes up and down - yours, mine, and that orange haired guys'. We all end up in the gutter eventually but at least we can look up at the stars.

      1. Anonymous Coward
        Anonymous Coward

        "The bitcoin price has gone up and down like my right arm in the pub."

        Don't they throw you out for doing that in public?

    2. DropBear

      "As an Assyrian I find that offensive."

      You can get offended as much as you want - is there currently an existing entity going by the name "Assyrian Empire"? No*? Well, there you go. It's not a reference to what may once have been, it's a reference to "there isn't one now". Nobody is exempt from that, it's just a question of when exactly...

      * Sorry, "I/we insist sticking the name on something everybody else is calling something else" does not count.

      1. Anonymous Coward
        Anonymous Coward

        just you wait!

        the Assyrians will Rise Again!

        Got a bust of Sennacherib in my pickup rear window! :)

  10. Cameron Colley


    I still don't understand what the benefits of bitcoin, besides being a pyramid scheme and aiding with committing crimes, are?

    How does Bitcoin help anything? If I use my credit card (a similar concept in some ways) then I've built-in insurance -- what do I get with Bitcoin? Even if, for example, I use Bitcoin to pay for a VPN to get around Chairman May's internet recording once I start using that then the provider knows my IP address and, therefore, it's traceable as me anyhow so why bother using Bitcoin?

    1. Brangdon

      Re: Why?

      It's main benefit is for people and countries who can't use normal banking services. A lot more people have smart phones than bank accounts in places like India. It's also for people who don't trust fiat currency (see, for example, the inflation currently in Venezuela). Historically it also allowed for cheap or free money transfers, even across national boundaries. Those days are gone because the system has reached capacity creating competition for space in the block chain, but they might return if the block size issue gets resolved. Finally, it allows for permission-less innovation. For example, if you are a business that wants to accept credit cards, you need permission from the CC company. They might refuse if they don't like the look of your business, for example because it competes with them, or you are Wikileaks, or it involves sexual services they disapprove of morally.

      If you are in the Western world, it's quite likely you have no real need of Bitcoin.

    2. Cameron Colley

      Re: Why?

      Darn it! Forgot to look at this sooner so the morons who downvoted without giving a reason won't see that I know they're fucking morons or scum who use bitcoin for crime.

      Also, thanks for the reply Brangdon.

  11. Dasreg

    A bitcoin, as a currency not a security, does not endow the bearer with financial payments deriving from a present or future revenue stream. Buyers of bitcoin who seek to gain from a price increase, beware.

  12. Pascal

    "Japanese interest rates are actually negative at the moment, meaning it costs money to save"

    How is that even a thing?

    1. DropBear

      Re: "Japanese interest rates are actually negative at the moment, meaning it costs money to save"

      No idea, maybe it's something similar to that other concept of "it costs money to work"...

  13. anthonyhegedus Silver badge

    I thought bitcoin was only used by ransomware scammers. I've never come across any other actual use for it. I won't buy any because I don't perceive them to be of value.

    1. Charles 9

      That's up to you, but privacy-conscious service providers like Scandinavian VPNs readily accept Bitcoin to create a degree of separation between buyer and seller (since the plods can't compel someone to divulge something about which they have zero knowledge). And more and more e-tailers will accept Bitcoin for payment. Even Steam takes Bitcoin.

  14. Phukov Andigh Bronze badge

    I hate to think how slow it got.

    when it takes almost a business WEEK to actually get money out of a sale when things are running many weeks does the exchange take to get your money deposited now?

    This thing makes no sense. Every single "benefit" promised has been broken or lost. Many more issues have been introduced. yet every single time even when an entire exchange is robbed or goes bust, somehow the prices and "consumer confidence" go UP.

    the kind of results one would expect if a well controlled central group were in charge, and not the barely herded cats that a large group of natural speculators would behave like.

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