Bitcoin Prices Down As Mt. Gox Concerns Escalate

Feb 25, 2014 at 6:15 a.m. UTCUpdated Mar 29, 2014 at 1:17 p.m. UTC. Uncertainty about the future of major bitcoin exchange Mt. Gox is growing in light of its recent decision to take down its website amid escalating, as-yet-unconfirmed rumors that it has been the victim of widespread theft and could be nearing a lengthy or even permanent shutdown of its services.

Mt. Gox, through intermediary sources, told CoinDesk that it has no comment on the news at this time.

At press time, prices at major bitcoin exchanges have recorded steep declines in just the last few hours, fueled by consumer uncertainty about the impact of a worst-case scenario at the once-leading bitcoin exchange.

After holding steady at roughly $550 throughout most of the day, the price of bitcoin on BTC-e declined sharply to a low of $480. From 9:00 pm to 12:00 pm EST, the exchange saw prices fall rapidly from $546. The price of namecoin, novacoin, peercoin and primecoin also declined on the news.

Mt. Gox was likewise a hot discussion point on the exchange's community chat room, with users debating the future of the exchange and what it will mean for bitcoin prices in the short and long term.

Others debated the fate of coins still held in the exchange, though for now, we know only that Japanese regulators are unlikely to step in to mitigate any damage.

Further, data from Bitcoincharts suggests the price of bitcoin was $135 on Mt. Gox at the time it halted services.

Prices were no doubt also affected by a joint announcement from bitcoin business leaders suggesting indirectly that Mt. Gox is no longer trustworthy.

"In order to re-establish the trust squandered by the failings of Mt. Gox, responsible bitcoin exchanges are working together and are committed to the future of bitcoin and the security of all customer funds."

Though the major businesses moved swiftly to distance themselves from Mt. Gox, such actions seem to have done little to stem the damage - at least as far as prices are concerned,.