Bitcoin Exchange Halts Trading After Big Selloff
It's either because of a huge influx of accounts or hackers
By John Johnson, Newser Staff
Posted Apr 11, 2013 2:09 PM CDT
Bitcoin tokens at software engineer Mike Caldwell's shop in Sandy, Utah. Caldwell mints physical versions of bitcoins, cranking out homemade tokens with codes protected by tamper-proof holographic seals.   (AP Photo/Rick Bowmer)

(Newser) – Bitcoin fans have to cool their heels until 10pm Eastern. The biggest exchange of the digital currency has halted trading after a steep drop in value yesterday, reports the Guardian. Tokyo exchange Mt. Gox blamed the drop—from $266 to about $100—on an "astonishing" number of new accounts that led to lags in trading. "As expected in such situations people started to panic, started to sell Bitcoin ... resulting in an increase of trade that ultimately froze the trade engine," it said in a statement.

Maybe, writes Matthew Boesler at Business Insider, but those kinds of lags in trading also could be explained by a hackers trying to manipulate the market. Whatever the cause turns out to be, "exchanges like Mt. Gox will have to figure out ways to mitigate the conditions that lead to massive price swings like that in order to attract a wider user base." If you need a refresher on the typical Bitcoin buyer, at least in the currency's early days, the Guardian explains: It's "a favorite of libertarians critical of central banks as well as those involved in illegal gambling and drug trades."

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Showing 3 of 7 comments
Apr 11, 2013 6:55 PM CDT
Halting trading because of a big selloff & a drop in currency value doesn't sound very free market libertarian to me. Sounds kind of managed, controlled, almost a Socialist over-response to normal free market currency fluctuations ;)
Apr 11, 2013 4:06 PM CDT
Man, I now feel bad for laughing to all those nerds that were spending like crazy a few years ago to make those crazy rigs with 4 GPUs to make enough calculations and mine a few bitcoins everyday. Most of them have a small fortune now.
Apr 11, 2013 2:58 PM CDT
I bought a bitcoin from one of these exchanges for $98, mostly for novelty purposes a few weeks ago. I don't even fully understand the complexities of how this all works. I think I am just going to hold onto it and see what happens. It's not like I invested my life savings in it, just a little money to say I own a bitcoin.