| NEW YORK
NEW YORK Feb 14 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
"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
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
"Professional traders would recognize that there is
overselling based on irrational fears," he said.