Key Points
- Coinbase users experienced an unexpected drop in their account balances to $0 during a Bitcoin surge.
- Despite the panic and FUD, Coinbase’s Layer 2 network, Base, remained resilient and continued to grow.
On February 28th, a significant surge in the value of Bitcoin (BTC) led to an unusual situation for several Coinbase users. Their account balances abruptly displayed a drop to $0, leaving them puzzled and searching for answers.
Many users took to social media platforms to share screenshots of their wallet balances. The company acknowledged the issue and reassured users about the safety of their assets. Despite anticipating a 10x surge in traffic, the actual increase following the Bitcoin hike surpassed expectations.
Impact on Coinbase and Bitcoin
Following the incident, there was a wave of panic and Fear, Uncertainty, and Doubt (FUD) surrounding Coinbase. This not only led to a temporary decline in the price of Coinbase stocks but also reportedly affected Bitcoin. The value of Bitcoin dropped by $100 billion within 15 minutes, seemingly triggered by the Coinbase outage.
Between 12:15 PM ET and 12:30 PM ET, Bitcoin’s price dipped from $64,000 to $59,000, marking a nearly 9% swing. This sharp decline happened when Bitcoin was on the brink of reaching a new all-time high, being less than 10% away from the milestone.
Resilience of the Base Network
Despite the panic and FUD, Base, Coinbase’s Layer 2 network, remained unaffected. The number of daily active addresses on the network continued to grow, reaching 90,000 at the time of writing. There was also an increase in daily transactions on the network, which grew to 406,000.
In the DeFi sector, Base was performing relatively well. The Total Value Locked (TVL) on the Layer 2 network had increased, along with the DEX volumes on the network.
