Bitcoins were down to $61.11 as of 9 a.m. ET Friday. Prices reached as high as $266 per Bitcoin around 7:30 a.m. ET Wednesday. But the price started to fall through the rest of day and Thursday morning.
Mt.Gox issued a statement Friday attributing both the pre-halt price fall and the halt in trading to the rush of new customers trying to trade in the electronic currency.
"The rather astonishing amount of new accounts opened in the last few days...made a huge impact on the overall system that started to lag," the exchange said. "As expected in such situations, people started to panic, started to sell Bitcoin in mass...resulting in an increase of trade that ultimately froze the trade engine."
The exchange said the shutdown was different from the cyber attacks that hit it and other Bitcoin sites earlier this month.
During the Mt.Gox trading halt, trading continued on some smaller Bitcoin markets, and the price fell sharply. When trading resumed on Mt.Gox about 10 p.m. ET, the price quickly plunged as low as $69.45, ricocheted back up to $135.69, then started to fall again. All the new volume flooding back to Mt.Gox caused another 2-hour halt in trading.
When trading resumed again, it started a less volatile sell-off to the $61.11 price.
Societe Generale currency analyst Sebastien Galy said that even if the bubble has burst for Bitcoins, it doesn't mean it won't have additional rallies in the future.
"Its trading is typical of a bubble," he said. "But there are still people who believe in it. You can't say we're going to zero tomorrow. Even assets that have no underlying value have people willing to trade in it." - CNN
Our economy depends on the whims and panic attacks of investors. We try to think that the investors are some outside, independent force over which we have no control - as if the investors are some aliens sitting on clouds, directing the flow of monetary traffic on planet Earth. Here's some news for you: we are the investors. We are the ones who have chosen to live according to whims, opinions, rumours and bubbles - causing the values of those things that we deem to be valuable to go up and down depending on our mood. This, obviously causes much suffering for many and much celebration for a few; as most of the smaller investors will lose out on this roller coaster while a few will emerge richer than ever with big, fat smiles on their faces.
How many times has the stock market crashed simply because investors "lose faith" or become "nervous" and so pull their funds? How does this then affect the economy in general? How many people will lose a part of their income? How many people will lose their savings, or retirement funds?
What does some investor's confidence have to do with the value of food or any other basic requirement to live well? Why should our lives be subject to the whims and instability of the economy? Our needs do not change - why then should our means to satisfy our needs change?
This economy is a strange one. I do not understand why we have made it so complicated and non-committal - as if a stock market crashing does not influence millions of lives drastically. Why do we not implement a system that will remain stable and committed to providing the good life to all? Maybe we enjoy the torture, the uncertainty of it all - well I don't, but maybe others do. "Oh, we may lose all of our money and then have to live in a shack next month with no food! How exciting!" Yeah right.