Binance and Coinbase, the world’s two largest cryptocurrency exchanges, both had service disruptions Wednesday that intensified a crypto selloff.
Why it matters: It’s a signal that the exchanges are still not equipped to handle the full breadth of the mania. Hundreds of billions in investor money are at stake after crypto’s explosive rise this past year.
- Binance temporarily disabled withdrawals in Ethereum and blamed network congestion.
- Coinbase also experienced delays.
- And Kraken said users experienced longer than usual processing times.
- By Wednesday evening, bitcoin had shed 14% on the day, and Ethereum lost 31%, according to Coindesk.
Be smart: One of crypto's selling points is the fact that the currencies are decentralized. The fallibility of the exchanges could lead to greater adoption of decentralized exchanges, Bloomberg notes.