The price on Mt.Gox did recover slightly shortly after the major drop, and is currently selling at around $115. By comparison, Bitcoin was trading around $850 on Mt.Gox immediately before concerns about the “transaction malleability” bug prompted the site to lock down transactions.
Speaking with PC World, BitPay’s Jeff Garzik characterized the dropping price as “escape selling,” caused by desperate Mt.Gox customers hoping to reclaim some of their funds in fiat currency.
Fears that Mt.Gox is insolvent has created a new trend in Bitcoin speculation, namely a derivative product with striking similarity to a credit default swap. Speculators are buying rights to Mt.Gox-locked Bitcoins at bargain rates, betting that Mt.Gox isn’t in as bad of shape as it currently appears to the market.