Bitcoin plunges as withdrawals halt

The Bitcoin price dropped to its lowest level in the nearly two months. The best-known operator of bitcoin digital marketplace, Mt. Gox(Tokyo-based) recorded one of the biggest drops for the day. This might be the effect of Mt. Gox announcing a halt on withdrawls of Bitcoins on Friday and said this would continue indefinitely after an unusual activity was detected.

The bitcoin price varied from one exchange to another. On Mt. Gox, the price fell by more than 27 percent from Friday’s price of $692 to as low as $500 early on Monday, according to the Mt. Gox website. At the end of the day, it was reported 14 percent down to $597. The price fall started on Friday when Mt. Gox announced temporary halt in withdrawals of bitcoins due to unexplained technical problems. On Monday, Mt.Gox said in a statement that withdrawals are on hold indefinitely as it has detected some unusual activities on its bitcoin wallets. It further added that a bug in the ‘bitcoin software’ could allow the transactions to be altered. This means that someone on the network might alter the transaction details and make it appear that a transfer of bitcoins had not occurred, when it had. Apart from this exchange issue, it also affects all the transactions being made to the third-party.

CoinDesk, which launched the Bitcoin Price Index in September removed Mt. Gox from its list stating constant failure of Mt. Gox to meet the standards of BitCoin Price Index. CoinDesk said in a statement that these recent withdrawal restrictions have made Mt. Gox inclusion in the BitCoin Price Index problematic. On CoinDesk’s bitcoin index it was about 6 percent lower from Friday’s close of $703.57, not as low as reported on Mt. Gox. Its low for the day was $540 as compared to $500 of the Mt. Gox.

The price had touched as high as $1,000 in late January.