Editor’s note: This article was first published in April 2013, as breaking news from 11 April 2013. The Bitcoin prices, the trading halt and the reopening time all refer to that day. Mt. Gox itself collapsed in 2014.
Mt. Gox, the main Bitcoin exchange, has temporarily suspended trading in order, as it says on its platform, to let the market cool off after yesterday’s crash. Trading is due to reopen at 2:00 AM on 12 April (tomorrow). After the dizzying rise in the price of Bitcoin to $266, within a few hours it fell to $150, climbed back to $200 in a matter of minutes and then dropped again to $120.
Right now, unless it is an error on the Preev.com platform, Bitcoin may have fallen as low as $61.
There were rumours that yesterday’s fall of more than 60% might have been caused by a hacker attack, in which the attackers triggered panic in order to pick up bitcoins at a lower price. Mt. Gox has denied this version, saying that what happened yesterday was due to a massive influx of new users, which slowed the platform down and then set off the panic.
Mt. Gox says no fewer than 20,000 new accounts are being opened every day to buy bitcoins, a surprising figure.
It also came out today that the Winklevoss twins, who sued Mark Zuckerberg for stealing their idea for Facebook, own 1% of all the bitcoins in the world. According to the New York Times, the Winklevoss twins hold 108,000 bitcoins that they bought last summer, probably at less than $15 each, so if they had sold their bitcoins yesterday they could have made more than $27 million on the deal.
All we really know is that thousands of users are stuck with bitcoins bought above $200 and are now hoping the price climbs back to those levels so they can make up for a reckless trade and save their money.
See also: Global economy: everything that could go wrong is going wrong
That is why, if we analyse Bitcoin as if it were a stock, it would now face huge resistance in the $260–266 area.
Plenty of people keep coming out to defend Bitcoin as a serious currency, but days like yesterday are exactly what undermines the confidence of anyone who isn’t in it to speculate.
Featured image: Steve Jurvetson, CC BY 2.0, via Wikimedia Commons.
