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Bitcoin's Wild Ride Shows It's Not Real Money

If you wanted to make the case for Bitcoin as a feasible and useful digital currency, yesterday wasn’t the best day to do so

If you wanted to make the case for Bitcoin as a feasible and useful digital currency, yesterday wasn't the best day to do so. According to Mt. Gox, the largest Bitcoin exchange, the currency started out at $230, spiked to $266, touched a low of $105 and then settled at just above $170 (it's now $123). That's, in the course of the day, a 15 percent jump followed by a 60 percent plunge off the day's high and ending with a substantial loss.

And during the day, it wasn't even clear where bids and offers were, or what the price was at any given moment. Joe Weisenthal of Business Insider reported seeing Bitcoin prices of $90, $170 and $225 on different sites. One exchange appeared to have suffered from a denial of service attack when there were severe lags in trading and quotes. Today, however, Mt. Gox's management team issued a press release saying they were a "victim of our own success" and that a flood of new accounts had overwhelmed the system and led to panic sales by clients that drove down the price. Mt. Gox shut down its exchange today to "allow the market to cooldown" and upgrade its systems.