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Bitcoin Continues Rise as a Major Supporter Alleges Price-Fixing

September 14, 2013 at 2:54 by BitcoinNews

The price at Mt. Gox remains elevated relative to other exchanges, ending the week at $140.38 after hitting a high of $145.60. The spread between the leading Mt. Gox and other exchanges has fluctuated over the past week from $10 to $15. However, the gradual lowering of this spread could be a sign that concerns about solvency and withdrawal issues are finally abating.

On the other hand, to add yet more to the controversy, the founder of the Pirate Party, Rick Falkvinge, published a rather long piece today arguing that the price of bitcoin is being rigged. Most of the commentators on the reddit BitcoinMarkets forum were inclined to agree with the sentiment, though not entirely with his analysis. Partly the concerns are that his back-of-the-napkin calculations only estimate bitcoin transactional value, rather than it’s currently popular function as a potential store of wealth.

In the case of Mt. Gox, it seems to also function entirely as a trading vehicle. The trading at Mt. Gox indeed appears to have become unhinged from the more realistic-looking market rates at the next three leading exchanges, for whatever reason. The other popular exchanges are all more closely aligned with prices between $120–130.

It’s also possible some amount of arbitrage betting is increasing the bid for bitcoin at these other exchanges, but in the long run it wouldn’t matter. Mt. Gox traders could buy and sell bitcoin for whatever prices they like and if there were no ability to withdraw that money, the rest of the market could safely ignore it.

Nonetheless, Mt. Gox still reports to be the volume leader with 18,276 bitcoin traded Friday while BTCe traded 2,566 btc and last priced at 124.79. A popular US-based exchange, CampBX, is offering bitcoin for $128. It’s also interested to note that the Canadian exchange Virtex, which had a relatively low price for bitcoin in recent weeks, has caught up quite a bit to C$126.50.

Additionally, there was a recent update to the Bitcoin QT client, as a new version 0.8.4 has just been released. There were some minor bugs which caused clients to not load properly, but the issue was quickly patched by the new update. And, it doesn’t appear than any transactions went awry. Still, one has to wonder when version 1 will be forthcoming.

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