Bitcoin Bubble on Pause As Markets Seize Up
Want a quote on the price for Bitcoin? Good luck.
In China, Bitcoins are priced at $930 on the leading exchange, BTC China. In the United States, Bitstamp is down. Mt. Gox offers up a price of $730 for U.S. dollar purchases.
The Bitcoin marketplace is... well, broken.
Why Bitcoin prices are out of whack
Prices between the major exchanges are usually small. Arbitragers take advantage of pricing differences to make sure market prices are within a few percentage points of one another.
However, Americans are largely locked out of the Bitcoin market. Coinbase reports that it has exceeded its daily purchase limit. If you want to buy, you'll have to accept the market price on Monday, November 25, whatever that price happens to be.
Bitstamp's site is currently down due to an overwhelming amount of interest. The site says "Access Denied":
Of course, that leaves only Mt. Gox for American purchases.
However, users report that getting U.S. dollars out of Mt. Gox is all but impossible. The company "temporarily suspended" withdrawals in U.S. dollars in June. The community's Bitcoin Magazine speculates that getting dollars out of Mt. Gox may take as long as 22 months.
Bitcoin services can't keep up with success
Bitcoin's growth has been nothing but a problem for the growing number of exchanges and Bitcoin sellers. Just a few months ago, Mt. Gox was the leading online exchange for Bitcoin transactions. The suspension of withdrawals in dollars made Bitstamp the go-to market.
But with Bitstamp down, new money can't exactly go into Bitcoin. All the people who saw Bitcoin's ever-rising price and decided to buy are on the sidelines, waiting for approval to buy or sell, or just waiting for the marketplaces to allow trading in the first place.
The Bitcoin bubble, it seems, is now on a temporary delay. That is, for Americans. The Chinese seem happy to keep Bitcoin priced at roughly $930 each.
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