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Bitcoin speculators stand to make money from Mt. Gox crisis

(Credit: Reuters) A mock Bitcoin is displayed on a table in an illustration picture taken in Berlin January 7, 2014. Bitcoin
February 21
11:47 AM 2014
by Nicel Jane Avellana

Tokyo-based Bitcoin exchange Mt. Gox is in the midst of a crisis which has provided a golden buying opportunity for some savvy speculators, CNNMoney reported.

Mt. Gox has suspended withdrawals because of a Bitcoin software glitch and the exchange has so far not yet found a solution to the problem. Thieves could take advantage of the situation and steal the Bitcoins of the platform's customers. Since they can't get their money from Mt. Gox now, the owners are concerned about the possibility of losing their deposits, the report said.

Mt. Gox only issued a short statement this week, which said that it was facing security problems that impeded their progress. The statement said, "We are committed to solving this issue and will provide more information as soon as possible to keep everyone in the loop."

Meanwhile, customers of the exchange who have lost hope of getting back their bitcoins have turned to speculators. They began to sell their rights to the digital currency they own-at slashed down prices, of course. Speculators who are still betting that Mt. Gox will still give back the bitcoins are the eager buyers of those account holders who have lost faith in the Bitcoin platform, the report said.

These speculators stand to cash in huge on these bets. The rights to Mt. Gox bitcoins could be had for $118 each this week. On exchanges that have taken steps to protect themselves from the glitch and are still doing business as usual, the bitcoin price is $570, the report said.

In regular exchanges, $570 will allow immediate ownership of a Bitcoin. However, those who speculate on Mt. Gox bitcoins are simply forking out money for the rights to own the bitcoins there when the withdrawal suspension is removed. If Mt. Gox lives up to its obligations, the speculators can offer their bitcoins at market value. If not, they get nothing, the report said.

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Nicel Jane Avellana

Staff Reporter at VCPOST.

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