Bitcoin prices have crashed after a major Tokyo based exchange halted the withdrawals of the virtual currency due to what it called technical problems. Bitcoin prices have crashed by more than 7% after Mt Gox which is a popular exchange for dollar based trade halted the withdrawal of the digital currency citing technical hitches.

Mt. Gox, said in a blog post it needed to “temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes.”

Mt Gox has promised an update on Monday February 10, Japan Time. It is interesting to note that Mt Gox has not said that it will reopen the Bitcoin operation.

The value of Bitcoin plunged by 7.3% at 11.33 NY time and stood at $726.05 as per the CoinDesk Bitcoin Price Index, which averages prices from exchanges including Mt. Gox. Earlier the prices had steeply fallen by more than 8% at 8.23 AM before stabilizing a little.

Barry Silbert from the New York based SecondMarket Inc, which deals with Bitcoin investment fund for accredited investors announced on Twitter Inc’s service said that it is going to buy Bitcoins as a response to Mt Gox closing and its trading team would make a market on a pilot basis, for orders of at least 25 Bitcoins.

Silbert’s company which has dealt with shares in closely held companies such as Facebook Inc before it became public felt that there is a clear need for a US based synchronized, amenable and reliable Bitcoins exchange mechanism to be placed in place.

Most US based exchanges have halted dealing in Bitcoins either due to the directions by law enforcement departments or were faced with difficulties obtaining business bank accounts due regulatory ambiguity.

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