Update: We’re still waiting to hear directly from Coinbase on exactly what went wrong, but the company put out a series of tweets confirming that GDAX trades (and Coinbase buys/sells) will be disabled until tomorrow morning.
GDAX also tweeted a brief note that trading was paused after “significant volatility” in the two minutes that BCH-USD trading was live, but hasn’t provided any additional clarity.
After just announcing full support for Bitcoin Cash, buying and selling on Coinbase and GDAX is temporarily disabled. For about an hour Coinbase and GDAX were both showing Coinbase Cash prices at around $8,500, which is almost three times higher than the $3,500 price it’s trading at on all other exchanges.
But for most of this time trading was disabled, so it’s not clear if any trades were actually executed at the higher price that was temporary shown on GDAX and Coinbase.
Right now there seems to be a ton of confusion if the $8,500 price was accurate or not. But since no other exchanges are showing similar prices, it’s very likely that this $8,500 price was some sort of pricing glitch and not the actual price the broader market was assigning to Bitcoin Cash.
As of 20 minutes ago the company said they are canceling the entire Bitcoin Cash order book on GDAX, and will provide another update soon. Buying and selling Bitcoin Cash on Coinbase itself remains down.
We’ve reached out to Coinbase for more information, and will update this when we hear back.
After the company’s announcement, Bitcoin Cash was added on Coinbase and GDAX simultaneously. This is important to note because the liquidity (and price quotes) to buy and sell cryptocurrency on Coinbase come from GDAX, its sister exchange. So essentially a stable order book is needed on GDAX before Coinbase buy and sells can be functional.
This is why in the past the company has added assets (like Litecoin) to GDAX months before being added on Coinbase, so there could be sufficient liquidity at launch. On Twitter, Coinbase’s Ex-Director of Engineering Charlie Lee clarified that it’s “operationally very hard” to add an asset to both platforms at the same time.
The company did give GDAX traders an hour and twenty minute window to “post” trades in order to establish liquidity before the market went live.
We’ll update this when we hear back from Coinbase.
Note: The writer owns a small amount of cryptocurrency.