Mt. Gox Chief Leaves Bitcoin Foundation; Can Investors Be Far Behind?
For a lot of people, bitcoin can be a trip to the midway of a county fair where all sorts of opportunities and prizes await the next sucker, um, investor. Or the virtual currency can be a funhouse where mirrors distort reality and what appears large is really small and vice versa.
Lack of regulation combined with rapid growth and a strong criminal element has created an unfamiliar landscape for most bitcoin investors. Before the FDIC insurance program in 1933, creditors, including savings depositors, were expected to do their own due diligence and determine if any given bank was safe for deposits. An unfounded rumor could easily fuel panic and a run on the bank.
Observing the Mt.Gox bitcoin exchange is the most recent incarnation of those old days.
Mt. Gox was one of the largest bitcoin exchanges until the site became a cyber-theft victim, forcing the company to halt all bitcoin withdrawals. For a few days earlier this month, cash withdrawals potentially offered an enormous payday for bitcoin buyers on its exchange.
A bitcoin on Mt. Gox is trading for about $125 per coin, while the CoinDesk index of several other bitcoin exchanges currently prices a bitcoin near $570.
If those odds sound attractive to you, by all means take a chance. I wouldn't touch it.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts