The price of Bitcoins has plunged more than 75% in the past two days, sparking a rush of activity that overwhelmed trading platforms and suggested the bubble in the virtual currency has burst.
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.
At about 10 a.m. ET Thursday, trading was halted on Mt.Gox, a Japan-based exchange that claims to handle 80% of Bitcoin trade worldwide. The price at that time was already at about $123, down more than 50% from the peak.
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.
