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Bitcoins Crash . . . Again

Written by Gary North on February 13, 2014

For the naïve souls who bought bitcoins from Mt. Gox at $1200 in December, they have lost 60% of their money. This assumes that they can get any of it back.

Look at the dollar price for bitcoins on Mt. Gox. Then compare with other exchanges.

For now, Mt. Gox investors cannot spend their bitcoins.

As you are aware, the MtGox team has been working hard to address an issue with the way that bitcoin withdrawals are processed. By “bitcoin withdrawal” we are referring to transactions from a MtGox bitcoin wallet to an external bitcoin address. Bitcoin transactions to any MtGox bitcoin address, and currency withdrawals (Yen, Euro, etc) are not affected by this issue.

The problem we have identified is not limited to MtGox, and affects all transactions where Bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved.

The phrase “suspending bitcoin withdrawals” surely caught my attention. How about you?

Brenda Lee said it best, way back when.

(For the full report, click the link.)

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7 thoughts on “Bitcoins Crash . . . Again

  1. My favorite tidbit about Mt. Gox is the fact that it was originally a site created for trading Magic: The Gathering game cards. It's like conducting financial transactions through your local comic book store: http://en.wikipedia.org/wiki/Mt.Gox

  2. Yup, it's crashed, all right. It's at $626.20 just a couple of seconds ago. And what was it a year ago? $30. Yeah, that's a crash all right.

    People who bought at $1200 have no right to gripe. It was an obvious speculative surge in a speculative market.

    Also, it's a direct threat to the powers that be, and anyone who knows anything about bitcoin expects them to attack wherever and whenever they can. This latest downturn is on the news of the president of a bitcoin company being arrested. If this was a real crash, though, it'd be down below $100…instead it dropped by less than 1/4, in a market that is known for occasional wild swings.

    This is basically not news. This is North stamping his feet and saying "See? See? I TOLD you it wasn't real money!"

  3. As for MtGox…they've been a problem for over a year. Anyone with sense has stopped buying from them a while back. It's a new market, things like this are entirely to be expected.

  4. "This assumes that they can get any of it back"

    Yup, one the exchange recently shut down after claiming a rogue user hacked it and stole all the BC on deposit there.

    But with the anonymous nature of BC there's no way to verify that story – it could just as easily have been the exchange owners creating a bogus account to steal all the other users' BC.

    So how do you know who to trust if you want to convert your BC to electronic currency sent to your bank account?

  5. And now it's at $661.70. Hmm, which direction is that, again?

  6. I BUY YOUR GOLD! says:

    "withdrawals suspended" – sounds like banks in cyprus- so whats the big deal? BT is a digital currency just like US$ and subject to the same bullchit, i dont see BT as being any more or less trustworthy then the other non physical monetary assets.

  7. Yes, Bitcoin did sell off recently. But using FRNs as the "real money" standard to compare Bitcoin to is, well…it strikes me as a bit brainwashed. I don't know whose fiat is better, the Federal Reserve's or Mt. Gox's. Time will tell. In the meantime, I think real assets are a real good idea.