The reason behind the recent Bitcoin price drop consists of several factors. One of them is the Bitcoin Malleability issue, which allows Bitcoins to be double-spent, thus harming the entire Bitcoin network. As a result of this, several major exchanges have temporarily disabled withdrawals.
As you can imagine, people don’t like it when their funds is locked up, and all they can do is sit idle and wait. This resulted to a massive price drop on Mt Gox, which for some reason, is still a lot of people’s preferred exchange. Prices are currently near the 135$ mark, compared to 800 little over a week ago.
This is not the only part of the problem though. I can understand that, as an exchange, you can’t run the risk of having people double-spend their Bitcoin. However, if people can’t withdraw their funds, why on earth are you letting them deposit Bitcoin and decrease the price even further? Surely that isn’t helping matters either, and also hurts your business down the line.
Technical issues can come up at any moment, and it may take a while to fix them, everyone can understand that. That’s still no reason to be incompetent when running an exchange, and not seeing the other issues you are creating yourselves.
Exchanges are a big part of rhe Bitcoin price drop in this case, which is a fact that shouldn’t be ignored. Mt Gox is an incompetent exchange more often than not, even when there are no technical issues involving Bitcoin.
A perfect example is the time it takes for your withdrawal from Mt Gox to show up in your bank account. Six to seven weeks is not abnormal. Totally unacceptable if you ask me. Let’s say your employer decides to hold your paycheck for six to seven weeks longer, just because “their bank account has a withdrawal limit”. You wouldn’t put up with that either.
I’m not saying all of this to turn people away from Mt Gox. My point is that there is a valid reason to look at any and all other options to convert Bitcoin to fiat currency , and use Mt Gox as a last resort until they can finally get their act together. How long that will take, is entirely up to them. But they’d better do it soon…..