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Bitcoin hits three month low on MtGox going offline

Article By: ,  Financial Analyst
February 25, 2014 10:15 AM

The value of virtual currency Bitcoin has fallen to a new three-month low after the world's largest exchange, MtGox, went offline.

Technical issues have been blighting the exchange for a number of weeks and all customer withdrawals of the digital currency were recently halted after it spotted "unusual activity".

Following MtGox going offline, the other six major Bitcoin exchanges issued a joint statement that acted to distance themselves from MtGox. It said: "This tragic violation of the trust of users of MtGox was the result of one company's actions and does not reflect the resilience or value of Bitcoin and the digital currency industry."

MtGox closure

Bitcoin saw a sharp decline on the closure of MtGox, although users of the virtual currency can continue to use exchanges such as Coinbase and BTC China to transfer their money.

The statement continued: "As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today. We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfil the promise that Bitcoin offers as the future of payment in the internet age."

Bitcoin has been one of the major stories within currency in the last year or two and virtual currencies have continued to rise on the back of its explosion. Although the digital currency could only be spent online for a long time, there are now a number of bricks-and-mortar locations such as bars and restaurants where bitcoin can be spent by investors.

The virtual currency also hit the headlines last year when one early adopter realised he had thrown away a hard drive containing bitcoin worth millions of pounds.

The Bitcoin Foundation emailed Business Insider a statement suggesting that MtGox may be insolvent. It said: "While we are unable to comment on whether or not MtGox's business operations employed operational best practices and reasonable accounting procedures, we can assure the public that the Bitcoin protocol is functioning properly."

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