Bitcoin’s latest price climb has garnered quite a bit of attention, breaking all time highs and leading many to declarations of a bubble. While the price and resultant media storm have been enjoyable to watch (particularly for bitcoin holders), the markets have also offered a number of more nuanced dynamics worth noting. The BTC / USD rate remains more than twice what it was just one month ago after a series of dramatic climbs beginning in mid-October. This weekend in particular saw quite a bit of notable activity as BTC / USD fell 26% from $360 to $260 in just …

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After remarkably low volume and volatility throughout much of August, yesterday saw one of the largest bitcoin exchange rate movements in weeks. A number of factors may have contributed, including the recent news that Germany recognized bitcoin as private money, but more interesting may be the market signals observable from the movements. Mt Gox counterparty risk quantified Despite their declining volume relative to the total market, Gox still handles the majority of USD/BTC trading with more than double the share of Bitstamp, their next closest competitor. As we pointed out last month, fiat withdrawal hiatuses at Mt. Gox have led …

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Today, Mt Gox announced they are suspending USD withdrawals for at least two weeks. This suspension was caused by a high volume of USD withdrawals from Mt. Gox’s bank accounts, with the company citing difficulty for their bank in processing transactions “smoothly.” This news comes one month after the announcement that the US Government seized their Dwolla bank accounts for failing to register as a Money Service Business (MSB). Two weeks ago OKPay, a long time partner of Mt. Gox wire transfers, suspended all operations with bitcoin customers. There will likely be two effects from this action: a temporary rise in …

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It’s no secret that bitcoin’s exchange rate has been inflated due to media attention, leading many to believe that there’s been a speculative bubble. While it’s impossible to tell what the true rate of a bitcoin should be, there is evidence that the increased attention has now subsided, yet bitcoin’s exchange rate continues to increase. Google Google trends uses an index to determine relative search volume for a specific term, with 100 being the peak. From early March until mid-April, we saw a nearly 10x increase in search volume. By the end of may, this large increase has nearly subsided …

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Dowlla is a payment system used by many bitcoin enthusiasts to transfer funds into and out of the largest bitcoin exchange, Mt. Gox. Dwolla just sent out the following email to users attempting to transfer funds to or from Mt. Gox: As of 12:13 PM on 5/14/2013: You’re receiving this notice because our systems have indicated that you’ve processed and completed a real-time Dwolla-to-Dwolla payment to Mutum Sigillum LLC (“Mt. Gox”) within the last 24 hours. Due to recent court orders received from the Department of Homeland Security and U.S. District Court for the District of Maryland, Dwolla is no longer …

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