Bitcoin Reels as Mt. Gox Exchange Halts Withdrawals

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Feb. 7 (Bloomberg) -- Jered Kenna, CEO at TradeHill discusses the impact on Bitcoin as the Mt. Gox exchange temporarily halts all withdrawals on Bloomberg Television’s “Bloomberg West.”

Commend the system need to be in a static state.

Just days after apple removed the popular bitcoin cap from the app store.

On skied with us -- sykype with us is the ceo of trade help -- trade hill.

Can you get your money in and out of these instruments?

With drawls have been halted.

Fundamentally, what i think is going on here is the one of the many places that it will be exchanged.

I have to disagree.

I hear a voice.

This isn't a fundamental issue about it going, the this is one of the exchanges on which people trade bitcoin for other currencies.

It is not the source code, it is this unregulated entity in japan that people used to do more than half of the trading day by day here at -- day by day.

The new york stock exchange doesn't say anything about stocks, while technically that would be true in currency or whatever it is, it is important to point out that if 50% cannot go through, the trading environment goes through -- goes away.

Within the bitcoin community, the diehard believers have problems with the exchange.

It is not the people who are wanting to take on bitcoin and use it as a currency to convert their lives to more of a bitcoin way of thinking, it is traders that are trying to make money on it using it as a commodity.

You run your own bitcoin exchange of ideas suspended trading at one time.

What do you think is going on here?

We have seen a huge price disparity for quite a while.

That was due exclusively to the effect that you could not resolve dollars from it.

Now that bitcoin is slowing down, i think the volume has been shifting away from that for years.

People usually quote bitstamp now.

It is important to separate bitcoin from that.

If you cannot get your dollars out of wells fargo, you do not blame the dollar.

It is very rare that that happens.

Let's talk about the other regulatory issues here.

There is no regulation yet been that is continuing to be a problem.

Is definitely -- and there is definitely regulation, new york is moving forward with some regulation that should be coming this year.

That is the reason you do not have an exchange in the u.s. right now, and that is the reason i'm not operating at all right now.

Over time can as you see these regulations evolve you're going to see more secure exchanges, long -- come along.

Keep in mind, that it is located in japan, so if you have your money and wells fargo, you probably feel safe egos within the zen is states i can keep using my bitcoin, as long as it is not on the apple iphone.

There will be more and more places in the u.s. that are popping up as one of our acres tweeted -- anchors tweeted.

This is about apple, disappointing to see apple turn it back -- its back on millions of bitcoin users worldwide.

There are a lot of other places to use bitcoin, and a lot of other places to use it and traded.

All the buying and selling i have ever done has been on the streets of new york.

They do not think the exchanges necessary.

That is the disparity.

Millions of what -- you are talking about trading on the streets of new york, which is a different marketplace.

What we see in the hurdles of the exchanges of the u.s.? new york is taking a stab at it, and there is so much potential money on the table.

We are talking about digital currency, it will not fail, and people are starting to realize that.

We will probably see something pretty decent by the end of the year.

Matt, can you give us an update on the actual regulations that have been passing?

New york has been talking about regulation, but nothing has happened yet.

I'm not sure is what is happening -- as to what is happening here in new york, but with washington i know a couple of people that are working in bitcoin are talking.

One congressman has bitcoin bitcoin asked for campaign donations to his campaign in -- has asked for campaign donations to this campaign in bitcoin.

The family of matthew mellon are talking to the u.s. government and trying to pass regulation with them as well.

You do not need regulation for bitcoin to work.

As long as the internet survives, bitcoin will be out there.

I think digital concern -- currently will survive even if bitcoin does not.

Because it is a democratically controlled, decentralized currency, whatever starts working in other digital currencies will be picked up and used in the bitcoin source code.

What about the real issue of the day today?

Can a digital currency overcome technical issues?

You do not have that with real money.

I wonder where the technical issues are.

I asked a lawyer this morning, i told them the exchange is down because of technical issues, and he joked that the technical issues were getting money into cases fast enough.

The software that they have written does not work well enough to communicate with bitcoin source code seamlessly.

It causes problems, because a lot of people say they do not have the right programmers.

This is a that jerod to answer better.

-- something that jerod could answer better.

We continue to see these difficulties of trading, some prices that have been quoted not just $100 higher, but quoted way out of whack with where it is trading elsewhere.

What is it about the exchange that tolerates these problems?

Historically there had the liquidity and they say that liquidity begets liquidity.

If you're not doing an over-the-counter trick about a lot of times it is your only option to buy $100,000 or $1 million from bitcoin.

That is not true anymore.

Many are gaining in volume, and there is a lot of options for those who want to buy large volumes bitcoinin -- of bitcoin.

When it dropped, and drop the price down, and was hacked back in 2011, there were not any really good options.

Had there been, it probably would have died dan.

This might be the end now.

We'll continue to follow this story.

Thank you.

Coming up, wyatt robinette venture capitalist -- why a prominent venture capitalist headed to the midwest.

? welcome back to "bloomberg west." shares of linkedin are falling today after concerns that growth is slowing down at the career networking site after the company reported earnings.

Shares are down about seven percent of and first-quarter revenue is 460 million dollars, marking the fifth straight quarter of falling sales growth.

To jumpstart growth, they are writing right media, a data company that helps job seekers.

-- buying bright media, a data company that helps job seekers.

Mark is joining me, thank you.

I would to talk about drive first.

After spending 12 years at sequoia, why move to ohio?

My partner, chris olsen, and i, saw the opportunities here.

There are 25% of the u.s. research here done in the u.s. -- done in the midwest.

You do not have the incubators and a lot of the technology that people could actually stay here and utilize, so people left.

Mark andreessen, who studied at the urbana, champaign, so we wanted to allow the best and the brightest here in the midwest, stay in the midwest.

We fundamentally believe that today it is the best place in the world to build a company.

I spent a lot of time in the startup scene of detroit were talking about the things you're bringing up.

If you guys just raised $250 million in funding, specifically what kind of innovations are you seeing out there that you want to put your money behind?

We think there is a fundamental shift in technology.

If you look at facebook, when mark zuckerberg moved from boston to silicon valley, he moved from money and access to technologists.

-- for money and access to technologists.

Billions of files stored without ever owning a server, it is all done in the cloud.

When you have things in the cloud, the most important thing is to be next to the customer.

We have world-class universities, and world-class engineers and merging from those universities, urbana, champaign, university of michigan, osu, and they can stay here and build the services and products here, and access the cloud services.

That is the one thing they have been they have that lj, but they also needed the capital.

So chris and i decided to start direct capital here in columbus, ohio.

The waters of early-stage investing are very crowded, how do you navigate the crowds?

If you look about it from the midwest per second -- perspective, the average fund size is what we would consider in silicon valley to be seed stage.

Very few of our funds -- it is my understanding we're the largest between the coasts, if you want to raise $4 million or $5 million way you have to raise it to the far east or fire west -- far west.

We wanted to grade a place that you could come to an get the same capabilities, networking, and other surveys -- services and not have to move your company to silicon valley or boston or new york.

You are the very first investor in linkedin, and on the board gave what he think of their new efforts to get into different businesses?

They are buying more companies like holes and right -- pulse and bright.

When you think of these efforts?

I a huge fan of -- m a huge fan of linkedin, and reid hoffman always asked if he could but together all of the white-collar workers across the world.

I think eventually there will be many more, and if you want to be the central place to get information when you want to be the service to them.

Facebook started as a fixed income -- bloomberg started as a fixed income platform and now you have bloomberg news and bloomberg tv.

There was always full -- the largest of large numbers.

It is a unique lap for them a unique and always.

They will see different changes and growth as different things happen.

It is interesting to me about how people are talking today about last quarter.

Remember the first couple of years, sitting on that board and trying to figure out how we would make money.

It is great to see what they have done their at linkedin.

They have a full-service marketing and recruiting operation message to correa but -- operation, should sequoia be doing that to?

We bought this in early 2000, we brought in help in recruiting in 2002. sequoia has been doing that for many years, as have kleiner perkins and others.

They just did not talk about it too much.

Mark andreessen has built a fabulous firm, they have just been more on the forefront of talking about these services.

Here at drive k we just hired a fellow who is heading up making sure we have all of the best talent in the midwest.

Getting talent is just as aboard as marketing and sales services.

Kleiner perkins'cofounder just recently joined us on bloomberg west.

He has been getting a lot of heat for this comparison to the not the persecution of the jews.

And ohio, what do you make of his, -- in ohio, what do you make of his comments?

? he made some very poor choices and analogies.

It is quite sad, because he is a very accomplished man.

He made some mistakes.

It felt like he is a step back from those comment, but a very poor choice of words.

Do you think he should take his name off the door?

Any firm or you have multiple founders, he has not been with the firm for many, many -- he has been with the firm for many, many years.

People just call it kp now.

When they started sequoia, they did not want to make it about any individuals.

Personally, we did not call it after ourselves, we wanted to create a firm for 30, 40, 50 years.

Yes we are the founders, but we think it is about the firm, not any individual.

All right, we will be watching you from out here in silicon valley.

He is one of the biggest movie stars on the planet, we will hear from george clooney next on the challenges of directing his new movie.

Welcome back.

George clooney many hats in his latest movie, which opens today.

He directed, produced, cowrote, and stars in the film.

It is about a platoon of u.s. orders in world war ii -- soldiers in world war ii who tried to rescue art from the not these.

We talked to him about the challenges of directing.

Anybody who thinks you have this worked out, they do not.

You do not learn by successes will because its methods are really easy.

Success is when you have a great review, and you think you have it down.

It is when they tear into you, and you learn what to believe and what not to believe.

That is hard.

I still struggle with those kinds of things.

If you want more of george clooney, you can catch the full interview on charlie rose.

We will be right back.

? bloomberg tv is on the markets, let's get you caught up on today's trading action.

These indexes say it all, real trust in the equity market with the s&p up .9% and the dow up within 118 points, even after a disappointing jobs number.

Back in 30 minutes with more.

You are watching "bloomberg west." we have your top headlines.

Apple says that bought back $14 billion of stocks, shares her rebounding today after dropping about eight percent post earnings.

Apple has been under pressure by activist investor carl icon to use it massive cash pile to buy back more shares.

The online travel companies like expedia, triplett buys her, and orbits are greening -- orbitz are gaining today.

Expedia also saw an increase in online ticket are just as very

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