Mt. Gox Shines Light on Litecoin

Litecoin (LTC) gains 53% on news that Mt. Gox will be supporting it in July.

Litecoin (LTC) gains 53% on news that Mt. Gox will be supporting it in July.

Yesterday, Mt. Gox released an update on Reddit to clarify some “inaccurate speculation” about their decision to temporarily suspend USD withdrawals for two weeks while they partner with new banks and improve its trade engine. Mt. Gox explained that the bank they are currently with could not handle the volume of withdrawals, as the severance of Dwolla put an excess strain on the bank’s available funds.

In the update, Mt. Gox mentioned that the exchange’s new trading engine is “finished, smokin’ fast, and is currently undergoing bench tests.” As part of the engine’s upgrade, Mt. Gox announced that it will be supporting Litecoin (LTC) in July:

As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we want to do things correctly from the beginning.

Litecoin’s value shot up more than $1 from $2.16 to a recent high of $3.30, a gain of 53%. Despite widespread criticism of Mt. Gox, the dominant exchange still has the power to influence the value of competitive cryptocurrencies, as clearly illustrated in the above graph.

BTC-e.com is currently the largest Litecoin exchange, but it also supports many other cryptocurrencies, including:

As competitive cryptocurrencies gain market share – and the charts indicate that they are – it will be interesting to see if and how Mt. Gox reacts. The bigger question is whether Mt. Gox will be able to maintain its dominant position in the cryptocurrency exchange market as emerging exchanges such as Camp BX and Crypto.st, among many others. One thing that Mt. Gox has heavily in its favor is the fact that its CEO, Mark Karpeles, is a Board Member of the Bitcoin Foundation.

UPDATE (June 23): Shout out to Mad Bitcoins for including this article in its latest clip: