Bitcoin volatility after Mt Gox downtime

Depending on the source you get a slightly different story, but the results are the same: there is a lot of volatility in Bitcoin pricing in early February 2014 because of problems at the Mt. Gox exchange. So much for a technologically pristine, mathematically pure, decentralized currency; when your “foreign exchange” depends on a very small number of businesses, it can have systematic vulnerabilities.

Mtgox-bitcoin-feb-9-2014

Coindesk, Why Mt. Gox, the World’s First Bitcoin Exchange, is Dying

Mt. Gox, the world’s original and once-largest bitcoin exchange, appears to be in a state of disarray after it suspended bitcoin withdrawals to work on what it said were technical issues. Meanwhile, the clamour of angry customer voices is growing.

The exchange’s moves have had a negative impact on the bitcoin markets. The price of 1 BTC plunged from $850 at the start of the week to $681, according to the CoinDesk Bitcoin Price Index, in the wake of the Gox announcement.

Business Insider quotes the Mt Gox letter to customers on the freeze in withdrawals:

We apologize for the sudden short notice. All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers. 



Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).



The graph at top shows that Bitcoin on the Mt Gox exchange has lost more than 25% of its value, with data from Bitcoinity.

Much more discussion on Reddit’s /r/bitcoin.

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