When Technology Fails - How Do Glitches Affect Cryptocurrency?
Just like any other digital system, crypto is also subject to technical issues. A simple glitch in the system can cause severe complications for investors. Problems with crypto cash out and price fluctuations can all be a byproduct of glitches. This page will explain how a crypto glitch can affect the overall crypto market.
What Happened With Coinmarketcap?
Perhaps the most famous example of a crypto glitch is an event that occurred in December 2021 on the Coinmarketcap website. The globally known price-tracking website showed jaw-dropping prices for crypto coins and tokens ranging in the trillions. Bitcoin was capped at $850 trillion, closely followed by Ethereum at $179 trillion. Stablecoins followed the trend.
As a result, other cryptocurrency exchanges and online wallets also bumped their prices, using Coinmarketcap as their example. CNBC and Yahoo Finance also followed suit.
Coinmarketcap didn’t explain what caused the crypto glitch but was quick to fix it. Matters were solved by the end of the day. This mainly sparked abnormal Twitter activity, but that wasn’t the only consequence of the glitch. If these issues had taken longer to fix, it could have been detrimental to the market. Here’s why.
How Can a Crypto Glitch Affect the Market?
Crypto glitches can result from many things, not just mixed pricing on popular websites. They can arise from faults in the code, human errors, and even software flaws. Let’s take a deep dive into the various ways a crypto glitch can affect the users and the market.
Price Fluctuations and Volatility
You likely already know that the crypto market is highly volatile. A crypto glitch can only add to the already shaky price of crypto assets. When such an event occurs, it can drive prices up or down and distort their value.
In addition, glitches can create panic and FUD amongst investors, who may believe the platform has been tampered with. Many investors might convert crypto to cash, sell Bitcoin, complete their crypto cash out, and move on. This can negatively affect the market, as too many large sums are being transferred or withdrawn in a short period.
Trading Abnormalities
A crypto glitch or abnormality can lead to trading halts. Trading halts, in essence, are events where certain exchanges stop selling digital currencies for a specific time.
These disruptions may make it difficult for traders to acquire or sell crypto at the prices and exchange rates they want. As a result, this will inconvenience traders and create possible monetary losses. Additionally, a bug impacting a well-known exchange platform may cause investor panic and market instability.
Crypto Cash Out Scams
In some severe cases, crypto bugs can cause crypto cash out theft. For instance, if a cyber attacker spots a flaw in a smart contract code, they could exploit it. The individual gains control of the funds and attempts a bank transfer or an untraceable withdrawal, like cashing out via a Bitcoin ATM.
It may also take a while for the trader to notice this change in their balance and face difficulties in recovering their digital assets. Due to the DeFi nature of crypto, stolen digital money is almost impossible to trace or retrieve.
Another glitch that can affect the crypto cash out process is freezing and errors throughout the withdrawal process. Make sure to check your credit card balance and contact the exchange or brokerage you are using ASAP. The faster you do it, the quicker you can resolve the issue and remember – don’t panic.
Slow Transactions
You could face network congestion due to a crypto glitch. This happens mostly to digital financial products with high trading volume. Let’s say you see a price peak in Bitcoin Cash – so you decide to sell your balance and reap the benefits of the price peak.
Of course, you’re not the only one trying to sell their Bitcoin Cash at the time. A massive volume of transactions takes a while to confirm, and the blockchain network may become overloaded.
Regulatory Scrutiny
Crypto-related errors may draw the attention of regulators. The current climate points towards the mass regulation of crypto products. Financial specialists are looking for bugs and issues to back up their point – that just like fiat currency, crypto should be traced and controlled.
Crypto glitches can flag up and draw the attention of regulators, who may want to enforce strict rules, especially if a glitch enables unlawful activities. Increased regulations may limit the potential benefits of cryptocurrencies by affecting their growth and general adoption. Of course, regulation has numerous perks, and much can be said about its effect, but that is a topic for another article.
Navigating a Secure Path
With all these points in mind, is there a way for users to navigate these obstacles? There are some potential strategies to avoid the effects of crypto glitches and safely buy and sell crypto.
1) Choose a Reliable Platform
To begin with, traders should choose reliable trading methods. With their advanced encryption and additional verification methods, platforms like Bitcoin 360 AI iFex are an excellent place to start. In fact, crypto brokers can help you mitigate risks and avoid FOMO and FUD traps. That way, if a glitch occurs, you have someone to speak to and help analyse the situation before making rash decisions. We recommend them because, unlike exchanges, you get to talk to someone face to face, and this sort of human contact is lacking on most trading platforms.
2) Look for Quick Issue Resolution
Finding a platform with excellent customer support is a must. In fact, crypto brokerages stand out with their round-the-clock customer care. Their committed support teams put forth an enormous amount of effort to resolve issues as soon as they arise, enabling customers to return to trading immediately.
3) Benefit From a Simplified User Experience
Of course, the platform you choose should function well even when no glitches occur. You shouldn’t get lost in complex processes. And if something doesn’t make sense, you should have the support you need for a smooth trading experience.
Brokers can help link your crypto profits to your bank account, offer the perfect payment method for your initial deposit, and, most of all – provide you with helpful information, such as market cap info, top-tier exchange rates for your favourite coins and tokens, and educational resources. All this to make trading as easy as possible!
4) Prioritise Quick Crypto Cash Out
Look for user reviews and make sure to check their experience with withdrawals. You don’t want to face any glitches during payout sessions. In addition, make sure you are using an affordable service. Look for low network fees and a cheap exchange rate when you sell cryptocurrency.
Can you connect your earnings directly to your debit card balance as soon as you tap sell? Have users stated it was quick to see their profits in their cash balance? If so, you’re on the right track! If visiting Bitcoin ATMs for your cashout in fiat currency is the only option, look for another place to buy crypto, which offers various crypto cash out options.
5) Keep Your Apps up to Date
Many glitches and bugs are fixed by developers when they release the newest versions of apps. If you notice a glitch, especially one to affect a coin’s market cap or the price of other cryptocurrencies, you can help developers by reporting it. This can increase the chances that they will spot and fix the problem sooner.
You can also reload a page to see if the bug has changed. In case it hasn’t, however, take a screenshot and provide it as evidence when you contact customer support to solve the potential issue. Most of all, keep a good eye on your applications and update their software as often as needed.
Final Thoughts
Glitches can 100% impact the crypto market and its traders, spreading uncertainty and adding to market volatility and scrutiny in the sector. But if you take the proper measures, you can protect yourself from crypto glitches.
You should be fine if you carefully select where to conduct your trading and try not to make rash decisions based on doubt and fear. The good news is there are platforms out there known for their reliable trading infrastructure and pristine customer support, which empower investors even in the face of nasty glitches.