Bitcoins Rebound After Initial Mt. Gox Drop

Bitcoin Illustration - OrangeBitcoins have proven resilient in the face of one of the most tumultuous weeks of the crypto-currency's brief history.

Earlier this week, Mt.Gox, formerly one of the world's largest Bitcoin exchanges, shut down. The site had been the subject of a great deal of scorn over the past number of months - it started with very slow withdrawals and continued to snowball from there. The site’s CEO, Mark Karpeles, resigned from the board of the Bitcoin Foundation earlier this week. A short time later, all of the posts on the Mt.Gox Twitter account were deleted. One day after that, all trading was halted on the Mt.Gox exchange, and the web site was changed to a blank page.

There is now a brief statement on the web site in which Mark Karpeles says that he is "still in Japan" and "working very hard with the support of different parties to find a solution to our recent issues."

Rumors have circulated of a "hack" at Mt.Gox that may have resulted in the loss of 744,000 Bitcoins, but nothing have been verified as 100% true as of yet. What really happened? I suspect we’ll find out shortly.

In the minutes and hours following the closure of the Mt.Gox exchange, the price of a single Bitcoin dropped to approximately $400. Many people jumped in to buy at these prices, and the price of one Bitcoin is now hovering at a little less than $600. This is well off of the 52 week high of around $1,130/coin, but still well above the 52 week low of about $31.

Bitcoin proved to be very resilient this week, especially as the crypto-currency came under a withering and often inaccurate attack from the media.

Some in the media proclaimed that the “CEO of Bitcoin” was arrested (note to media: Bitcoin is a decentralized currency and doesn’t have a CEO) and that Bitcoin was on the brink of collapse. Sure, the logistics of how the Bitcoin crypto-currency works can be a bit hard to understand, but it still amazed me how inaccurate some in the media were this past week.

The Mt.Gox closure was declared by some as the beginning of the end of the Bitcoin crypto-currency, but others view it as an important event towards further establishing the mainstream acceptance of Bitcoins. The shadier operators will die, they say, only to be replaced by legitimate operations backed by reputable venture capital firms.

Where will Bitcoins be trading at one year from now? What other headaches will proponents and holders of the crypto-currency have to endure?

At the very least, the Bitcoin ride has been an interesting one.

Filed under: General Knowledge

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