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Coinbase reports technical difficulties amid crypto volatility

Yahoo Finance reporter David Hollerith explains how the bitcoin sell-off is impacting operations at Coinbase.

Video Transcript

RACHELLE AKUFFO: All right, well, crypto stocks falling sharply, along with the broader markets. Getting news now of Coinbase reporting technical issues later in the day as well. Let's talk to David Hollerith now, who has the latest. Dave, what are you watching now?

DAVID HOLLERITH: Yeah, so Coinbase was-- or Coinbase customers were reporting incidences of sort of failed trades for one cryptocurrency in particular, which is called Near. It's used to sort of power the Near protocol. And so what we know, after speaking with Coinbase, is that this issue is actually on the Near protocol side.

So the network uses validating computers to process transactions. And one of those computers was somehow out of sync. It's sort of unclear why. But the problem has been fixed. And it seems trading should continue as normally. That being said, Coinbase is still watching the situation. And it's kind of a good test run for Ethereum's merge, which is sort of like the biggest upgrade crypto protocol undergoes.

But just that being said, today's obviously been about the consumer price index reaction in the crypto market as far as digital assets go. And that's not been good. Cryptocurrencies all show sort of the signs of being riskier assets. One easy way to think about it is just that the US dollar strengthens on this kind of news. And, you know, that obviously is bad for things that are priced in the US dollar. And that's maybe just an automatic math reaction for why that's happening.

The more complicated side, which has to do with whether or not the Federal Reserve will hike interest rates is also being expected by traders. And I think it sort of remains to be seen what's going to happen there. But the investors I've spoken with are still showing some optimism. And it's mainly hedged around the Ethereum merge. Not so much about what the price movement will mean, but in terms of the technology, whether or not it can show that maybe crypto has more fundamental value than it has over the last year, which has, obviously, been very speculative.