ROLLERCOASTER RIDE

Bitcoin broke $11,000, then plunged 18%, as thousands of newbies signed up for cryptocurrency wallets

Obsession
Future of Finance
Obsession
Future of Finance

Bitcoin’s price soared past $11,000, plunged as low as $9,300, and then recovered to around $10,000—all in the space of 24 hours of trading yesterday (Nov. 29). It was an object lesson in the volatility of the bitcoin markets. However, the violent price swings didn’t stop hundreds of thousands of users opening cryptocurrency wallets for the first time, according to two major wallet providers.

The wallet and exchange service Coinbase reported record traffic to its services yesterday by a factor of eight. It has already been adding hundreds of thousands of new users a week. On Nov. 27, it added 100,000 new users in a single day.

Another popular wallet service, Blockchain.info, reported over 120,000 new users yesterday, according to investor Jeremy Liew who is also well-known for being Snapchat’s first investor.

As the bitcoin price rose and new users flooded into the markets, trouble struck. Coinbase’s US-based exchange went down, alongside two other major exchanges, Bitstamp in Slovenia, and Gemini, which is operated by the Winklevoss twins, in the US. Some users were unable to load the websites. According to Coinbase, the record traffic caused its services to slow down. Gemini reported performance problems due to “an influx of web traffic.” Bitstamp didn’t provide an explanation for its service disruption.

The bitcoin price declined steeply as the exchange outages prevented some traders from accessing their accounts. In about three hours, the price plunged 18%, from $11,400 to $9,300. Coinbase and Gemini restored their services in about 10 hours, while Bitstamp resumed its service in about an hour. Bitcoin is now trading at $9,900, or down 0.7% over the last 24 hours—it’s almost like nothing even happened.

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