Bitcoin's wild ride continued this evening, immediately carving 35 percent off the value of the digital currency as Mt. Gox, the world's largest Bitcoin exchange, resumed trading after an extended suspension of operations.
The value of the peer-to-peer currency began trading at $78 a Bitcoin against the U.S. dollar, falling as low as $65 before recovering to trade as high as $135. The plunge followed yesterday's, which saw Bitcoin's valuation drop 61 percent before recovering a bit with a 37 percent loss.
The decentralized digital currency, which had quadrupled in value in the past four weeks, traded as high as $266 per Bitcoin yesterday before a dramatic correction dropped its value to $105. It eventually recovered to trade as high as $145 a Bitcoin.
The Tokyo-based exchange, which handles three-quarters of all Bitcoin trades, announced this morning it had suspended trading until 7 p.m. PT to allows the market to "cool down." However, traders still had the option to cancel their pending and open orders, the site said.
Rebutting inaccurate reports that Mt. Gox had fallen victim to a distributed-denial-of service attack yesterday, the exchange said yesterday's price drop was due to an influx of new trades. The exchange said the number of trades executed tripled in the previous 24 hours.
"Indeed the rather astonishing amount of new account opened in the last few days added to the existing one plus the number of trade made a huge impact on the overall system that started to lag," Mt. Gox said in a statement. "As expected in such situation people started to panic, started to sell Bitcoin in mass (Panic Sale) resulting in an increase of trade that ultimately froze the trade engine."
After languishing in the midteens in January, Bitcoin's value has quadrupled in the the past four weeks, capping a three-month run that saw a price appreciation of 1,500 percent. Bitcoin's recent meteoric growth has been credited to financial uncertainty in Europe and nascent investor curiosity.