Coinbase Warns During Times of High Volatility, Access Could Become 'Unavailable' (cityam.com)

An anonymous reader quotes City AM: A leading bitcoin exchange has warned that customers may be unable to get their money out quickly in the event of a crash in the cryptocurrency's price. Writing in a blog post last week, Coinbase's co-founder and chief executive Brian Armstrong, said despite "sizeable and ongoing" increases in the firm's technical infrastructure and engineering staff, access to Coinbase services could become "degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for period of time," he said.

Armstrong added that there would be restrictions on how much customers could sell, or sell limits, to "protect client accounts and assets"... Bitcoin's market capitalisation rose above $300 billion for the first time earlier this week when its price rocketed to an all-time high of just over $17,000. Many analysts have warned that bitcoin represents an unsustainable bubble, though no one is quite sure when it will burst.

Comments

used to be known as "bucketshop"

[mbkennel]

This setup, trading private ious on a private unregulated 'exchange' which is really a business of its own has a very long history. Known as a 'bucketshop'. And it is inevitably filled with scammers and fraud, because the company that runs it has a direct financial interest in giving you poor prices and execution slippage.

Been there for equities (now forbidden), retail foreign exchange (lots of ripoffs there), and now bitcoin.

When professionals trade in banks, they ask *multiple* market makers for two-way, buy and sell quotes. Two way is important so that the counterparty doesn't know ahead of time whether you want to buy or sell. Not true when you're on a computer platform which already has your position and clicks---so it can shade prices and spread and blow you away or margin call you during volatility, giving you worse prices than the real market and pocketing the difference.

Re:Reasonable

[plopez]

Perhaps the most important knowledge gained is that governments should not and cannot be allowed to control the means of exchange.

Have you been asleep these past 17 years? Did you not see the instability wrought by repealing the Glass-Steagle act? Have you an understanding of the effect such things such as insider trading laws in helping maintain a close semblance of a Free Market in Financial markets?

Are you aware in the 1800's where there was little or no regulation of the markets there were 16 collapses, depressions and panics. In a much smaller economy. Between 1873 and 1896, a period called "The Long Depression" there were 6 of them.

The S&L crisis only occurred after it was deregulation. It destroyed S&Ls, a major competitor of banks, and now they are going after credit unions.

Because it is unregulated when the crash comes the fat cats, the exchanges and insiders, will walk away with huge sums and everyone else gets screwed.

The only way to even approximate a Free Market, a level playing field highly efficient and unbiased, is through regulation. Free Market != unregulated market. Unregulated Market usually means a captured market. That is the problem of libertarianism.