BTC/USD: Second-busiest dollar denominated Bitcoin exchange suspends services
iNVEZZ.com, Monday, January 05: The BTC/USD has risen so far in today’s trading amid news that Bitstamp, the world’s second-busiest USD exchange for the cryptocurrency has suspended services. Bitstamp was also temporarily removed from the CoinDesk Bitcoin Price Index as its application program interface (API) has been unavailable since this morning. The digital currency has made a modest recovery after suffering a steep selloff over the weekend.
According to a message on the exchange’s website today, Bitstamp had suspended services after it “detected problems” with its hot wallet, initially stopping withdrawals and urging customers not to attempt any Bitcoin deposits. The company has now changed its regular main page to an announcement saying “we have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015”.
It has warned clients not to make any deposits to previously-issued Bitcoin addresses, stating that deposits to these addresses “cannot be honored”, but reassured investors that it holds a large portion of its Bitcoins in cold wallets, and had sufficient supplies to cover any deposits made before 9:00 GMT today.
As of 14:23 GMT the BTC/USD stood at $272.78 up 2.55 percent intraday. The price of a bitcoin recently took a dive, falling 17.2 percent from $311.05 on Friday to $257.61 on Sunday. The cryptocurrency peaked above $1,000 in December 2013, but lost 56 percent of its value in 2014, making it the worst performing currency for the year, beating the Russian rouble which declined 55 percent. According to Matt Phillips of business website Quartz: “Bitcoin is the worst investment of 2014”.
PYMNTS.com quoted David Evans, chairman of Global Economics Group as saying: “It is hard to know where the value of bitcoin will settle but my impression is that there is still a lot of irrational exuberance out there with a lot of rationalizations about the price falling and lots of speculation that it will rise again. So it wouldn’t surprise me if bitcoin prices ran up again.”