Bitcoin Exchange Advises Customers of System Collapse if Prices Plunge


A leading bitcoin exchange has advised that customers may not be able to get their money out quickly if a crash occurs in the price of the cryptocurrency.

In a blog post that was published last week, Brian Armstrong, the co-founder and chief executive of Coinbase, said that despite “sizeable and ongoing” increases in the technical infrastructure and engineering staff of the firm, access to the services of Coinbase could eventually become “degraded or unavailable during times of significant volatility or volume.”

He stated: “This could result in the inability to buy or sell for period of time.”

Armstrong added that there would be some restrictions on the amount that customers could sell, or “sell limits,” in order to “protect client accounts and assets.”

The comments arose amid a week of large swings in the price of bitcoin. On early Friday morning, the digital currency surpassed $17,000. However, on
Sunday, its price collapsed to as low as $13,150 a coin before the launch of the bitcoin futures contracts of the Cboe Global Markets.

The Cboe bitcoin futures contract will make use of the ticker XBT and will be equivalent to one bitcoin. The bitcoin futures contracts of the CME Group will go live on the 18th of December.

The launch of bitcoin futures on organised exchanges offers a chance for bitcoin to break through more milestones as many new investors pour in. However, analysts have also hinted that it could lead to short selling.

Earlier this week, the market capitalisation of Bitcoin grew above $300bn for the first time when its price soared to an all-time high of over $17,000.

Analysts have warned that bitcoin depicts an unsustainable bubble, though no one is really sure when it will burst. The annual list of “outrageous” predictions of Saxo Bank include a forecast that the cryptocurrency could reach as high as $60,000 before it crashes.

Security concerns come as another issue for bitcoin, as proven by a hack last week.

NiceHash, a cryptocurrency mining marketplace, was struck by a security breach in which possibly millions of dollars worth of bitcoins were stolen.

Yesterday, the Telegraph reported that the deputy director for cyber skills and growth at the National Cyber Security Centre, Chris Ensor, said that it was investigating possible security risks that are associated with bitcoin.

The Treasury is also attempting to crack down on bitcoin by developing European Union anti-money-laundering rules that push traders to disclose their identities and report about suspicious activity to include cryptocurrencies.

Read Also: Bitcoin Futures Surpasses the $18,000 Mark on Cboe Market Debut