Bitstamp to resume withdrawals, steadying nervous bitcoin market

NEW YORK Sat Feb 15, 2014 3:54am IST

Mock Bitcoins are displayed on a table in an illustration picture taken in Berlin January 7, 2014. REUTERS/Pawel Kopczynski

Mock Bitcoins are displayed on a table in an illustration picture taken in Berlin January 7, 2014.

Credit: Reuters/Pawel Kopczynski

Related Topics

NEW YORK (Reuters) - One of the bitcoin exchanges that recently suspended withdrawals of the digital currency on Friday said it planned to allow redemptions to resume later in the day, restoring some confidence to the shaken market.

Slovenia-based Bitstamp, among the largest bitcoin exchanges, said on its website that developers had come up with a solution to thwart the cyber attacks against its platform that had forced the hiatus. It suspended withdrawals on Tuesday, days after one of the best known exchanges, Mt. Gox, suspended withdrawals indefinitely.

"After additional testing, we plan to enable bitcoin withdrawals later today," Bitstamp's statement said.

Mt. Gox has not yet resumed withdrawals and has not issued a public update on the matter since Monday.

Bitcoin prices continued their pattern of volatile trading on Friday, and prices varied widely by exchange. On Mt. Gox, where trading has continued despite the withdrawal suspension, the price plunged to as low as $302 early on Friday, but recovered later in the day following the Bitstamp announcement, last trading at $443, down about 7.5 percent from Thursday.

"The news that Bitstamp is resuming withdrawals restored some confidence and prompted people to buy back bitcoin," said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey. "The fear trade seems to have dissipated."

At CoinDesk, which this week excluded Mt. Gox data from its Bitcoin Price Index, the currency's price was substantially higher. There, bitcoin was quoted at $647.12, up more than 8 percent on the day.

Adding to the choppiness were reports that the online drugs marketplace Silk Road 2 had been hacked and drained of about $2.7 million worth of the digital currency. CNN said the site's administrator posted the news late on Thursday.

The first Silk Road site, which like its successor was accessible only using a special program that hides users' physical locations, was shut down last year by U.S. law enforcement authorities, and the man authorities say was behind its operations was arrested and charged with narcotics trafficking and money laundering.

"There should be no impact on bitcoin prices based on the reduction of illegal activity," said Sebastien Galy, currency strategist at Societe Generale in New York. "It really indicates that there's nervousness in the market."

Galy said seasoned traders likely bought bitcoin after its price dropped.

"Professional traders would recognize that there is overselling based on irrational fears," he said.

(Editing by Jonathan Oatis)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Tech Results

Reuters Showcase

Data Breach

Data Breach

Staples says investigating possible payment card data breach.  Full Article 

Cyber Attack

Cyber Attack

China-backed hackers may have infiltrated Apple's iCloud - blog.  Full Article 

Fat Paycheck

Fat Paycheck

New Microsoft CEO Nadella's pay tops $80 mln with big stock awards.  Full Article 

Court Case

Court Case

Facebook sues lawyers for pursuing dubious Ceglia lawsuit.  Full Article 

Card Data

Card Data

Staples says investigating possible payment card data breach.  Full Article 

e-book Pricing

e-book Pricing

Amazon says strikes deal with Simon & Schuster on e-book prices.  Full Article 

Reuters Interview

Reuters Interview

Apple, IBM to shed light on apps, alliance next month.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage