Just when Bitcoin appeared to be reaching some semblance of stability, BAM! It crashed again.
Leading Bitcoin exchange Mt. Gox suspended trading this morning, causing the currency’s value to drop to $619 from $783 — a 21% decrease.
“In our efforts to resolve the issue being encountered by various Bitcoin withdrawals, it was determined that the increase in the flow of withdrawal requests has hindered our efforts on a technical level,” Mt.Gox said in a statement. “To understand the issue thoroughly, the system needs to be in a static state. In order for our team to resolve the withdrawal issue, it is necessary for a temporarily pause on all withdrawal requests to obtain a clear technical view of the current processes.”
The value of the crypto-currency has since recovered somewhat to $732 at the time I’m writing.
Mt. Gox has suspended trading before. It was forced to halt trading in April 2013 after a major price crash, and it stopped trading for two weeks in late June to make upgrades to the system. At that time, the price was around $100, so the stakes are considerably higher now.
Mt. Gox has faced a number of technical problems over the past month and is now putting the system in a “static state” to figure out what’s going on.
$619 is still a high value for the digital currency, which was valued at $21.71 a year ago. However 21% is a big drop, and a yet another reminder of Bitcoin’s volatility.
The crypto-currency gained major momentum in 2013, soaring past $1,200 at one point, but it has also faced some humbling moments. China cracked down on Bitcoin in December, which caused the price to tumble. Officials cracked down on the Internet black market Silk Road, where Bitcoin is used to pay for illegal drugs and weapons, and a number of people were arrested for money laundering. There were also a number of big wallet hacks.
Like many commodities, Bitcoin’s value is highly susceptible to external events. It can go up just as fast as it can go down.
All Bitcoin withdrawal requests in Mt. Gox’s system will be returned and can be reinitiated once the issue is resolved. Mt. Gox said it will provide another update on Monday, Feb. 10. And then the price will probably go up again. Until the next thing comes along.