Investing.com - Bitcoin prices lost more than 10% on Tuesday, as one of its leading major exchanges, Mt. Gox, went offline amid fears that it is on the verge of bankruptcy.
According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency declined 11.1% to trade at $485.15.
The price of a Bitcoin last traded at $491.00 on Slovenia-based BitStamp, down 7.9%, while prices on BTC-e dropped 10% to trade at $496.90.
BitStamp is now the world’s largest Bitcoin exchange, while Bulgaria-based BTC-e is the second-biggest by volume.
Sentiment was dealt a severe blow after the website of the Tokyo-based Mt. Gox Bitcoin Exchange went blank on Tuesday, in the latest development to roil the virtual currency market.
The website of the troubled exchange has been offline since at least 10:30 p.m. Eastern time on Monday. Mt. Gox has yet to issue any statement about reasons behind the site going offline and whether it would be back at any time.
A report from the Wall Street Journal said the website appeared to have been deleted, as accessing the site yielded an answer from the its servers but displayed nothing.
The news comes amid rumors that the exchange had become "insolvent" after losing 744,408 Bitcoins, worth around $350 million at current prices, due to a years-long hacking effort that went unnoticed by the company.
Mt. Gox’s troubles started on February 7, when it was forced to halt all Bitcoin withdrawals, citing technical issues.
Prices on Mt. Gox plunged to $91.50 on February 21 as investors were disappointed with a lack of concrete details regarding progress made on resuming withdrawals on the struggling exchange.
Mark Karpeles, chief executive officer of Mt. Gox, resigned on Sunday from the board of the Bitcoin Foundation. The exchange was a founding member and one of three elected industry representatives on the board of the Bitcoin Foundation.
Mt. Gox was once the world's largest Bitcoin trading exchange, with volume topping 1 million trades a day at its peak.
Meanwhile, six other major Bitcoin exchanges, including Bitstamp, BTC China and Kraken, issued a joint statement distancing themselves from Mt. Gox.
"This tragic violation of the trust of users of Mt. Gox was the result of one company's actions and does not reflect the resilience or value of Bitcoin and the digital currency industry," the exchanges, including Coinbase, Circle Internet Financia and Blockchain.info, said in a statement.
"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today,” the statement continued.
"We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that Bitcoin offers as the future of payment in the internet age," they added.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.