MtGox Shows Signs of Life, Climbs Back to $350

Bitcoin (BTC) has climbed back to the high $200’s and beyond this weekend as signals emerge of a possible resumption

Bitcoin (BTC) has climbed back to the high $200’s and beyond this weekend as signals emerge of a possible resumption of withdrawals.

BTC had fallen as low as $91 on Friday as despair set in and investors salvaged whatever they can get from their bitcoins. It had continued to bleed value following Thursday’s disappointing update from MtGox which showed little or no signs of progress.

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Bitcoin Recovers to $300 on MtGox

BTC later retested the $90’s. Before getting a chance to slip further, indications of a possible resumption of withdrawals began to surface, as described on reddit. There was initially some uncertainty if the transactions indeed originated from MtGox.

There were also suggestions that these were really transactions to BitcoinBuilder (to be discussed in another post), which allows MtGox users to trade their “MtGox bitcoins”, currently stuck, with “real bitcoins”. The destination address is internal to MtGox (hence the reason MtGox users can send there), so this alone does not evidence true withdrawals from MtGox.

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Later however, users confirmed that BitcoinBuilder transactions do not show up on the blockchain, and these transactions were eventually confirmed on the blockchain.

Currently, BTC is gaining at a feverish pace on MtGox, recently hitting $350- a $160% gain since bottoming out in the $90’s. The speed of these gains vastly outpaces that of recent declines, which occurred over a longer period and were mostly symptomatic of growing uncertainty and frustration over MtGox. The gains, however, are representative of growing conviction of concrete progress.

BTC is trading at $638 on Bitstamp and $621 on BTC-e, which is 20-25% higher than their low points and in line with their scaled down tracking of prices on MtGox.

Prices are likely to recover in tandem with growing evidence and confidence in MtGox’s capabilities for full-scale withdrawals and that recent fixes are more than just patchwork.

 

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