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Reports US

US stock market daily report (February 07, 2014, Friday)

February 10, 2014, Monday, 05:12 GMT | 00:12 EST | 09:42 IST | 12:12 SGT
Contributed by Millennium Traders

The 3rd largest bitcoin exchange Mt. Gox, initiated a temporary halt on withdrawals Friday because the firm said it needed to “temporarily pause on all withdrawal requests to obtain a clear technical view of the currency processes.” It promised an “update” - not a reopening - on Monday, Feb. 10, Japan time. There is no major bitcoin exchange based in the U.S., even though U.S. investors are pouring millions into domestic bitcoin start-ups and U.S. companies are beginning to adopt the virtual currency as payment.
Subsequent price declines have prompted SecondMarket, a trading platform, to start a pilot program to buy and sell bitcoin, a move it says highlights the need for a major U.S. based bitcoin exchange. SecondMarket has established itself in the bitcoin space through its open-ended bitcoin trust. SecondMarket Chief Executive Barry Silbert said in an email Friday about the company’s pilot program, “Given the Mt. Gox issue, we decided to experiment with a two-way market. There is a clear need for a U.S. based, regulated, compliant and trustworthy bitcoin exchange. This could be the first step in that direction.” 
Bitcoin is a digital currency created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men meaning, no banks! There are no transaction fees and no need to give your real name. Bitcoins are created through a process called 'mining', in which participants verify and record payments in exchange for transaction fees and newly minted bitcoins. The US is considered Bitcoin-friendly however, Bitcoin has been a subject of scrutiny due to ties with illicit activity. Bitcoin as a form of payment for products and services for merchants is an incentive to accept the currency because transaction fees are lower than the 2 - 3% typically imposed by credit card processors.
In a virtual-currency hearing held in January by the New York State Department of Financial Services, Jeremy Allaire, chief executive of Circle Internet Financial, a company that aims to make bitcoin payments easier for merchants, said the lack of a major bitcoin exchange in the world’s biggest economy has contributed to the volatility that has become a trademark of the virtual currency. Allaire said the total daily trading volume of bitcoin is similar to that of a small-cap stock on one exchange. “The single most important thing that we can do, is get some serious exchanges established here in New York,” Allaire said at the hearing. While there are companies in New York, working on establishing bitcoin exchanges, regulatory uncertainty and reluctance from banks to work with bitcoin companies remains a major hurdle.
In the wake of the Mt. Gox news, bitcoin prices were sharply lower across exchanges. In a press release from Mt. Gox, “The increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state.”