While all activity on Mt. Gox has ceased as of Monday evening, Bitcoin prices on other Bitcoin exchanges only experienced a brief dip.
On Bitstamp, for example, Bitcoin prices fell from about $580 to $400 as news of the Mt. Gox shutdown spread. But within a few hours, Bitcoin prices were back over $500, even going as high as $540.
That's well below the highs of over $1,000 seen in December, but far from the total collapse of the digital currency that one might have expected from Mt. Gox going dark.
After all, Japan-based Mt. Gox was the first, and for most of its existence, the largest Bitcoin exchange.
Now, after a three-week suspension of Bitcoin withdrawals that had many customers up in arms, the company has suspended all activity, including trading.
For several hours, the main website was blank. Eventually that was replaced with this message:
Dear Mt. Gox Customers,
In the event of recent news reports and the potential repercussions on Mt. Gox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.
Mt. Gox Team
Many believe Mt. Gox to be insolvent, and all customer money lost – both in bitcoin and fiat currency. The Mt. Gox chief executive officer, Mark Karpeles, told Reuters in an e-mail that there would be an "official announcement soon," but offered no details on whether the site would ever return.
Most in the Bitcoin community assumed that Mt. Gox was in serious trouble from the moment it suspended bitcoin withdrawals Feb. 7. Many customers engaged in panic selling on the Bitcoin exchange in an effort to convert them to dollars they could try to extract via the international banking system. Bitcoin prices on Mt. Gox dropped as low as $91.50 at one point.
Whether Mt. Gox returns or not – and that appears very unlikely – the black eye that this episode has delivered to the digital currency won't knock it out.
Let's take a closer look at how Mt. Gox got into such a dire condition and what this episode tells us about the future of Bitcoin.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.