Coinbase (COIN) Keeps Dropping the Ball During Market Rallies, and It's Time to Ask Why

In the past decade, few companies have experienced the same meteoric rise as Coinbase (NASDAQ: COIN). With a market cap of $75 billion, it's the market leader in North America, and in every bull run, it transforms into a fee-generating machine.

Coinbase (NASDAQ: COIN) has experienced a meteoric rise in recent years, becoming the market leader in North America with a market cap of $75 billion. The company's platform is known for generating massive fee revenue during bull runs.

However, despite its large revenues and profits, Coinbase has faced criticism for its inconvenient outages and inability to handle surges in demand. The latest example occurred during the launch of the Trump meme coins, when U.S. President Donald Trump and First First Lady Melania Trump launched back-to-back tokens on the Solana blockchain.

Coinbase users experienced waits of up to 48 hours to get in on the action, and many transactions were stalled for 20+ hours. After the launch frenzy had died down, CEO Brian Armstrong took to X (formerly Twitter) to explain what happened. He said his company wasn’t prepared for the sudden surge in users and would be working to up its game on Solana.

We have the Solana backlog triaged, and transactions should generate quickly again. If your transaction got canceled you can retry it now – apologies for the trouble.

It’s clear we need to step up our game on Solana, scale our infrastructure, and provide native support for…

Coinbase has a history of problems during bull runs

This recent Solana debacle isn’t the first time Coinbase has dropped the ball at a critical moment. During the 2020/2021 trading season, it buckled under pressure on more than a few occasions. Here are some of the more memorable instances:

April 29, 2020 – Coinbase went offline as BTC surged past $6,000, frustrating traders who wanted to capitalize on the price movement.

May 9, 2020 – Another outage occurred just days before the BTC halving, a time of heightened market interest.

June 1, 2020 – Coinbase went down again as BTC spiked to $10,000, preventing users from buying or selling during a key rally.

January 29, 2021 – A massive outage occurred as Dogecoin (DOGE) spiked 300% due to the retail frenzy fueled by WallStreetBets.

May 19, 2021 – One of the biggest crashes in digital currency history (BTC dropped from $43K to $30K in a day) and Coinbase struggled with downtime, frustrating traders who couldn’t react quickly.

October 27, 2021 – Shiba Inu (SHIB) skyrocketed, and Coinbase had delays, showing its recurring issues with handling surges in memecoin interest.

These outages and freeze-ups almost always occur during significant market events and heightened volatility. Whether a popular coin is surging or crashing, Coinbase struggles, leaving users frustrated that they’ve missed out on the action.

Yet, outages during key moments aren’t the only thing plaguing Coinbase. There’s an equally concerning trend that has been unfolding.

Can Coinbase honor cashouts?

There have been widespread claims on social media about Coinbase account freezes. Many users have reportedly experienced account freezes when trying to cash out large amounts, leading some to question whether Coinbase can honor cashouts or whether it’s stalling for time.

Fun Fact: There’s no legitimate reason for Coinbase to suddenly restrict and freeze your account, and then later magically unfreeze it for compliance purposes. Sending in additional documentation is a stalling tactic.

If there was truly a problem with your account, it would…

Those who have been involved in the digital currency and blockchain industries for a decade or more have to ask: is this economic freedom? What is the point of blockchain tech if corporate third parties like Coinbase can freeze accounts, withhold funds, and hold up transactions by failing to scale?

Is it perhaps the case that Coinbase backed small block BTC, crippling the effectiveness of the original Bitcoin protocol, because it saw an opportunity for itself to act as a layer-two gatekeeper, making vast profits in the process? And isn’t this just old wine in new bottles if so?

How can this keep happening every cycle?

It’s time to face the truth: there’s no practical reason why Coinbase should continue to face these issues. It’s certainly not a resource shortage because its last reported revenue of $1.13 billion and net profit margin of 6.69% leaves plenty of money to invest in infrastructure.

So, what is it then? Perhaps Coinbase’s priorities are wrong. Instead of listing endless garbage tokens to generate more trading fees, maybe it should focus on scaling its tech stack and preparing for the next surge.

We’re still far from mass adoption of digital currencies, but we’re getting closer with every cycle. The more new users encounter problems like Coinbase repeatedly creates, the longer that will take.

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