Triple whammy hits bitcoin price

Triple whammy hits bitcoin price

Bitcoin's price has plummeted by around 20% after exchange MT Gox temporarily suspended withdrawals, Apple kicked a popular wallet off of its App Store and Russia outlawed the crypto-currency.

Japan-based MT Gox, one of the world's biggest bitcoin exchanges, says in a statement on its site that an "increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state."

A temporary pause on all withdrawals has been made, with those already in the system returned to users' Mt Gox wallets until the issue is fixed.

Bitcoin's price is down 21%, to around $720 on Mt Gox.

Although rumblings about withdrawals from MT Gox have been heard for some time, bitcoin-dedicated site CoinDesk also notes that trading volumes have soared over the last day.

In another setback to the currency, Apple has taken down the popular BlockChain app - which has been downloaded 120,000 times - from its store. BlockChain boss, Nicolas Cary, told the New York Times that the decision was a pre-emptive strike by Apple as it prepares to launch its own mobile payments service.

And in a third blow, Russia's Prosecutor General's office has issued a strong statement on virtual currencies, warning: "Russia's official currency is the ruble. The introduction of other types of currencies and the issue of money surrogates are banned."

Comments: (1)

A Finextra member
A Finextra member 07 February, 2014, 11:45Be the first to give this comment the thumbs up 0 likes

Surprise, surprise...

As to that Russian statement, that depends on what they mean by "money surrogate"... They don't ban rouble-linked or rouble-denominated financial derivatives (which ARE money surrogates, funny enough). How is that different from rouble-linked digital assets?.. If I buy 10 "digital apples" at 100 roubles each, and then give those "digital apples" to a third party who then converts them back to roubles, where does "money surrogate" come into a picture (unless you count barter as one)?..

One needs to differentiate between digital currency and digital cash. They are similar, but not the same. One is a wild dark horse, the other is a civilized pathway to the future.