Saturday, February 8, 2014

Several Days of Rumors of Mt. Gox Insolvency Led to Panic Withdrawals

LaTi reports:
Bitcoin prices have crashed over the last few days--again!--this time because Mt. Gox, a major bitcoin exchange headquartered in Tokyo, abruptly announced it was suspending all withdrawals for "technical" reasons.
Mt. Gox said the suspension was temporary, but didn't say when customers' funds would again be available. It promised there will be an "update," though not a resolution, on Monday[...] [W]ithdrawals were frozen on Friday, after several days of rumors about solvency problems at Mt. Gox. The firms says customers' bitcoins still remain in their digital wallets--that is, their accounts at Mt. Gox--and will be available once its technical "issue is resolved." 

LaTi also commented:
Whether you're into bitcoins as an investment, a speculative play, a genuine alternative to dollars, euros or yen, or as a device to move money across national borders without worrying about currency exchange regulations, that's not the sort of price action you want to see in your financial instrument--especially not if it's caused by the problems of an unrelated operator in Tokyo.
Chalk it up to another indication that bitcoins are not ready for prime time.

As of Friday evening bitcoin were trading at $665.00. LaTi reported that bitcoins had been quoted at $1,038 on Mt. Gox as recently as Jan. 26.

So much for Bitcoin "stability" recently heralded by Bitcoin fanboys.

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