Crypto News: Bitcoin Plunges, Coinbase Suffers Outage
The crypto marketplace is like the Wild West of the financial world -- and it's been even wilder than normal over the past 24 hours.
Here's a recap of some notable events that took place over the past day.
Bitcoin pulls back sharply
Bitcoin's volatility is back. After surging more than 300% from its lows near $3,200 back in December, the world's most valuable cryptocurrency has seen its price sink by more than 20% from its recent highs near $13,800 in the past 24 hours.
Other cryptocurrencies -- including Litecoin, Ripple's XRP, Ethereum, and Bitcoin Cash -- are also down more than 15%. Overall, the total market capitalization of cryptocurrencies at large fell by roughly $75 billion over the past day.
Image source: Getty Images.
Some traders are chalking up Bitcoin's fall to a simple technical correction after being "overbought," alleging that traders are taking gains after the cryptocurrency's huge recent upward move.
Others say the vicious drop was amplified by excessive leverage in the marketplace. Some crypto exchanges offer margin services that allow traders to leverage their bets by as much as 100 times. "The presence of leverage exacerbates the moves in both directions and affects the speed dramatically," Genesis Global Trading CEO Michael Moro told CNBC.
One thing is for sure: Bitcoin's notorious volatility has returned. Where it takes the popular cryptocurrency's price next remains to be seen.
Coinbase suffers outage
Popular crypto exchange Coinbase experienced a service outage on Wednesday. This was likely another factor that contributed to price declines for Bitcoin and other cryptocurrencies, as exchange problems tend to reduce investor confidence and overall market sentiment.
Bitcoin's recent surge has brought many traders back into the marketplace. Exchanges such as Binance, Bitstamp, and Coinbase have experienced record-high trading in Bitcoin and other digital currencies in recent days. While this is profitable for the exchanges, it appears such activity may have placed a strain on Coinbase's systems. Coinbase's site was down "for a short period of time due to high volume," a company spokesperson told CNBC.
Coinbase wasn't the only trading service that experienced issues during the day. Popular trading app Robinhood was also rendered inaccessible for a brief period of time, according to Coindesk.
These trading platform outages highlight one of the many risks inherent in the crypto markets: You may not be able to access your investments when you want to. Traders should plan accordingly, and factor the possibility of additional exchange outages into their strategies.
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Joe Tenebruso has no position in any of the cryptocurrencies mentioned. The Motley Fool has no position in any of the cryptocurrencies mentioned. The Motley Fool has a disclosure policy.
