CRYPTO MOVERS AND PRICES
Crypto continues to lift marginally from yesterday's mid-day sell-off. Spot volumes are about in line with the 30-day average.
CRYPTO STORY OF THE DAY
On May 19, the BitMEX trading platform went down for unplanned maintenance for the second time In 3-months. There have been several exchanges experiencing similar issues in the volatility of H1 2020. We feel as though the narrative of these issues is overly negative and doesn’t reflect some of the complexities of running a true 24/7 exchange infrastructure.
In a blog post released today, BitMEX described a hardware malfunction leading to 2 separate server restarts as the cause of the issue. Throughout the downtime the platform's status page noted a, “major outage” in their trading engine. The exchange had a similar issue during the March 12/13 drawdown where order books essentially froze for over an hour. The exchange that time blamed an attack and characterized the events as more one-time. Derbit experienced other issues in mid-March where many order books completely emptied. Finally, Coinbase has also gone down twice over the last 2-months.
Takeaway: There are obviously plenty of disgruntled, concerned customers when such a shutdown occurs. The events can be particularly scary with a platform like BitMEX where many use their products for hedging etc... That said, the exchanges, which require 100% uptime in the 24/7 market of crypto have an extremely difficult and unprecedented task. In equity markets, for example, trading is open for about 8-hours per day. In the event that something goes wrong, systems can be designed to just remain open until that 4:00 or 5:00 p.m. close. Full diagnostics/fixes can be run offline for over 12-hours until the next open. Crypto exchanges don't have that luxury and as a result should have unplanned maintenance much more frequently. That said, traditional exchanges still have occasional problems and are shut down midday.