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Bitcoin takes a dive as Mt. Gox, a major exchange, suspends withdrawals

Bitcoin takes a dive as Mt. Gox, a major exchange, suspends withdrawals

The price of one bitcoin fell by more than $100 overnight

Bitcoin's value declined sharply Friday, just as Mt. Gox, an online exchange for buying and selling the digital currency, announced that it was temporarily suspending withdrawals.

Bitcoin was trading for roughly US$750 late morning U.S. Pacific time according to CoinDesk, which aggregates the price of Bitcoin across several exchanges. Bitcoin had been trading for about $850 for much of this week.

Given its volatility, pinpointing the exact cause of any rise or fall of Bitcoin is difficult, but the timing of the drop in trading price suggests it was tied to technical problems experienced by Mt. Gox, the prominent Bitcoin exchange. The Tokyo-based site said Friday that it was temporarily suspending bitcoin withdrawals, due to unspecified problems that appear to have been causing long delays in converting stored bitcoins to dollars.

"The increase in the flow of withdrawal requests has hindered our efforts on a technical level," the site said in a blog post. To fix the problems, Mt. Gox said it needed to put a temporary pause on all withdrawal requests "to obtain a clear technical view of the current processes."

It's not clear how long Mt. Gox will be suspending withdrawals, though the site did say that it would provide an update Monday. Withdrawals in the site's system will be returned to user accounts, but the trading platform will otherwise perform as usual, Mt. Gox said. Mt. Gox did not immediately respond to a request for comment.

Mt. Gox has hit bumps in the road before. The site temporarily shut down last November, also following an uptick in activity. Service was also suspended last April following swings in Bitcoin's trading price.

It's not clear why more people may have sought to take their bitcoins out of Mt. Gox. One possible explanation could be Apple's decision Wednesday to remove Blockchain, a Bitcoin wallet app, from its mobile store. Given the strength of Apple's platform, that move could have sparked concerns over its viability.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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