You may have read by now about yesterdays price plunge, followed by the bounce back.
It was caused by Mt.Gox, an exchange with a long history of problems. Over the past 6 months, Mt. Gox has been notoriously hard to get cash out of. Then last Friday, they halted Bitcoin withdrawals, saying that they had a technical issue to work out and they would resume on Monday.
Well Monday came… and they then said that it was due to an error in the Bitcoin code, which would allow someone to withdraw bitcoin, claim it wasn’t sent, and withdraw again. I won’t get into the technical aspects of this, but it’s true- however, it’s been a known issue since 2011, and one which is easily fixed on the exchange itself.
However, Mt.Gox is using old, poorly written code, and never fixed this. It appears some of their users may have exploited this weakness, although the extent of the theft is not known.
The worst part of the fiasco was that Mt.Gox said that all exchanges are prone to this bug, which simply is not true. This caused a mass of panic selling. Then when the word got out that Mt.Gox’s statement was false, the price rebounded.
Bitcoin is still operating at a very small market cap with relatively low volume- causing it to be prone to these types of swings.
Fortunately, clients of Coin Republic didn’t panic, in fact, some ordered more on the dip!
I know most clients of Coin Republic are long term investors of Bitcoin. I am working with an expert to write a report on creating a secure paper wallet to store your coins with, long term. This report will be free.