Bitcoin plunges after marketplace indefinitely halts withdrawals

Mon Feb 10, 2014 5:48pm EST
 
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By Sam Forgione

NEW YORK (Reuters) - The price of the digital currency bitcoin slid to its lowest level in nearly two months on Monday after bitcoin digital marketplace Mt. Gox said a halt on withdrawals it announced on Friday would continue indefinitely after it detected "unusual activity."

The bitcoin price varied dramatically from one exchange to another, with Tokyo-based Mt. Gox, the best known operator of a bitcoin digital marketplace, recording one of the biggest drops for the day.

On the Mt. Gox platform the currency plunged to as low as $500 early on Monday, down more than 27 percent from Friday's final price of $692, according to the Mt. Gox website. It last traded at $595.74, off nearly 14 percent from Friday.

"This technical issue is of a much larger intensity than we've seen in the past," said Sebastien Galy, currency strategist at Societe Generale in New York. "The market may be realizing that there are issues which are specific to these forms of currencies."

The bitcoin in recent months started to gain wider acceptance, with Overstock.com and the Sacramento Kings basketball team both saying they would begin to accept the currency.

More recently, the digital currency has drawn increased scrutiny. New York state's top bank regulator in late January revealed plans to regulate businesses handling transactions in bitcoin this year.

TRANSACTIONS COULD BE ALTERED

The bitcoin price started falling fast on Friday when Mt. Gox said it was temporarily halting withdrawals due to unexplained technical issues.   Continued...

 
Mock Bitcoins are displayed on a table in an illustration picture taken in Berlin January 7, 2014. REUTERS/Pawel Kopczynski