Bitcoin Breaks Records, and the Exchanges Where It’s Traded

Bitcoin’s historic rally is causing growing pains for the platforms where it’s traded, leaving investors unable to buy or sell the digital currency for hours at a time.

As Bitcoin surpassed $40,000 for the first time on Thursday, the most widely used cryptocurrency platform was buckling under pressure. Coinbase said it’s investigating connectivity issues on both its web and mobile apps.

It’s not the first time there’s been a disruption.

Exchanges have had problems coinciding with rapid price increases throughout the past year: On June 1, Coinbase experienced a fivefold increase in traffic over four minutes when Bitcoin reached the $10,000 milestone. About three months later, when the currency broke the $12,000 barrier, trading was temporarily halted.

Trading was also disabled on Oct. 5, Oct. 20 and Oct. 27. In response, Chief Executive Officer Brian Armstrong tweeted that the company would be adding capacity — servers and customer support — to deal with increased traffic.

On Thursday, a spokeswoman for the company didn’t have an update beyond saying that it’s still investigating the outage. Last month, the biggest U.S. cryptocurrency exchange said it has filed confidentially with the Securities and Exchange Commission to go public.

Binance, another popular exchange, has also experienced disruptions previously that were disclosed by CEO Changpeng Zhao on Twitter. Like Armstrong, he promised to add more server capacity in response to the downtime. Binance wasn’t experiencing an outage on Thursday.

“As platforms grow, we are bound to encounter teething issues,” Zhao said in November. “We do work very hard to try to prevent or minimize them, but I believe all exchanges will face system issues over time.”

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