The cryptocurrency market has been soaring lately, causing novice investors to try and get in where they fit in. As a result, trading app Robinhood’s crypto order system crashed Thursday, April 15.
“On Thursday evening, interest in Dogecoin surged as it rose past 25 cents, putting extreme pressure on crypto trading systems. As we processed orders, one of our systems failed, which brought down our crypto order system,” Robinhood wrote in a blog post. “The system was recovered in about an hour, meaning customers could trade with some intermittent issues. We were back to normal within two hours.”
However, that wasn’t the end of it. “On Friday morning, we saw a similar spike in activity as Dogecoin rose to nearly 50 cents. For Robinhood this led to sporadic crypto order failures and delayed notifications for some customers,” Robinhood continued, adding they would work to prevent such crashes in the future.
Dogecoin began as a joke in 2013 when software engineers Billy Markus and Jackson Palmer created it. However, last week, the cryptocurrency reached very high heights.
According to Bloomberg Wealth, Dogecoin rose more than 110% on Friday, April 17 and changed hands to the tune of $68 billion. The rise has been aided by billionaires Mark Cuban and Elon Musk advocacy for it. Some analysts do not share Cuban and Musk’s optimism, however, and have predicted a crash similar to the dot.com burst in the 1990s.
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“This reminds me of the dot com days. We knew something big was going on, a lot of investors were chasing it hard. That led to a bubble,” Scott Knapp, chief market strategist at CUNA Mutual Group, told Bloomberg Wealth. “For every Amazon.com there were 10 pets.com that went bankrupt. Is Dogecoin the pets.com of the cryptocurrency era?”
“It’s reminiscent of GameStop [which also skyrocketed in February due to a social media frenzy before falling],” Galaxy Digital Holdings CEO Michael Novogratz said in an interview with Bloomberg TV. “I would be very, very worried if one of my friends was investing in Dogecoin at these prices.”
However, crypto advocates are optimistic the currency will continue to rise and help transform financial markets.
“On the altcoins front, we continue to see strong momentum,” Delta Exchange CEO Pankaj Balani told Bloomberg, adding that “decentralized exchange coins will be in focus in the next few days, given that the market has validated Coinbase at a $100 billion valuation.”
Legendary hip-hop MC Nas, who made a lot of money last week through his investment in Coinbase, summed up his thoughts on crypto in one tweet on April 14.
“Long crypto forever…. in sickness & in health,” Nas wrote.
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