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Bitcoin Trade Halted by Mt. Gox Exchange After Price Drop

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Bitcoin Trading Halted by Mt. Gox Exchange After Plunge in Price
Created four years ago by a person or group using the name Satoshi Nakamoto, Bitcoin is a virtual currency that can be used to buy and sell a broad range of items -- from cupcakes to electronics to illegal narcotics. The currency has been subject to large swings in value in recent days. Photographer: Chris Ratcliffe/Bloomberg

April 11 (Bloomberg) -- Mt. Gox, a Tokyo-based exchange that handles bitcoin transactions, halted trading of the virtual currency to let the market “cool down” after a plunge in price.

The price of bitcoins collapsed by 46 percent to $123.40 from $230 in the past 24 hours, according to quotes on Mt. Gox’s website. In a statement, the company cited an increase in trade volume and not a cyber-attack, which has caused shutdowns in the past.

Bitcoin is a virtual currency that can be used to buy and sell a broad range of items -- from cupcakes to electronics to illegal narcotics. Online exchanges across the world offer a market for bitcoins to be bought and sold against dollars, euros, yen and other currencies. Bitcoin has been subject to large swings in value in recent days.

“People started to panic, started to sell bitcoin in mass (panic sale) resulting in an increase of trade that ultimately froze the trade engine,” Mt. Gox said in the statement.

Trading is halted until April 12, after a surge in the number of bitcoin trading accounts took a toll on the exchange’s trading systems, causing them to “lag,” Mt. Gox said.

Other exchanges remain open and are processing orders. Tradehill Inc., based in San Francisco, is open, according to the company’s founder and Chief Executive Officer Jered Kenna.

“When we built the platform we anticipated a high amount of volume,” Kenna said in an interview.

Tradehill’s trading volume has exploded in the past few days, he said.

“We’re seeing people looking for a more professional experience coming over to us,” Kenna said.

To contact the reporter on this story: Max Raskin in New York at mraskin5@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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