Coinbase’s exchange GDAX has stopped trading the virtual currency Bitcoin Cash (BCH) just hours after opening order books for its newest asset. Coinbase added BCH to its platform but is currently only letting customers send and receive the cryptocurrency. The platform plans to enable buy/sell soon, depending BCH’s performance on GDAX.
The exchange released a statement on Twitter last night with timestamped updates, explaining that they had paused BCH-USD trading (the only Bitcoin Cash trading pair enabled so far) at 17.22 PST due to “significant volatility”. The exchange explained that the decision to halt trading was made “to ensure a fair and orderly market.”
Based on data from data provider CoinMarketCap, the last quoted price of Bitcoin Cash before trading was disabled was at almost $9,000 which is an increase of over $6,000 from the current market price of $3,300.
On their own Twitter, Coinbase informed users last night that they will enable buy/sell functionality for BCH in their app and web version as soon as “there is sufficient liquidity on GDAX,” estimating that would happen sometime today.
Possible reason for the halt
In addition to GDAX’s official explanation for the halt in trading, one of the possible reasons behind the abrupt pause is the sudden influx of users to the exchange, which likely put a strain on the platform.
This may be due to the fact that Bitcoin Cash is a hard fork of Bitcoin -- Coinbase users who held Bitcoin when the hard fork took place in August were automatically given the equivalent in Bitcoin Cash when the platform started supporting it.
As soon as Coinbase added BCH, eager users with new capital entered the exchange’s trading platform, causing a possible strain that has forced the exchange to stop trading.
Coinbase’s decision to allow the trading of Bitcoin Cash on its platform was made after months of studies and monitoring of the cryptocurrency’s market performance and other developments. Since it forked from Bitcoin in August, it has become the third-largest digital currency in terms of market capitalization.