Bitcoin Prices Hug $500 in Rangebound Weekend Trading

Bitcoin prices are trading close to the important $500 support level this weekend. Earlier in the day, BTC/USD hit a high of $506.91 on BTC-E before pulling back. The lowest low this Saturday stands at $492.52. The fledging virtual currency is currently trading at $499.80 on BTC-E, compared to $498 on BitStamp.

There is still no official reaction from the People’s Bank of China on the deposit ban rumors posted two days ago. Charlie Lee, CEO of BtcChina was quoted as saying that, if the initial notice by the PBOC was meant to be kept private, we may never get an official confirmation of its validity by the Bank.

However not all jurisdictions are hostile to bitcoin. The Financial Supervision Commission of the Isle of Man, a self-governing British Crown dependency, just issued a favorable ruling on cryptocurrency regulation. According to the new rules, a bitcoin exchange that holds client funds with a licensed overseas payment service provider is not required to obtain a license in the country. The commission however warns potential investors that: ‘’it is possible legislation could be amended in the future to bring the proposed activities within regulated activity and/or to make the activity subject to the AML Code and thus subject to the draft Designated Businesses (Registration and Oversight) Bill 2014’’.

The Isle of Man boasts a low tax burden compared to its neighbors. Individuals are taxed at 20% to a maximum of £115,000 per year, £230,000 for couples if they choose to have their incomes jointly assessed. Most businesses pay no corporate tax, banks pay 10%.

Bitcoin Prices Rebound Slightly on Mtgox as Exchange Issues Statement

Bitcoin prices rebounded slightly on the troubled exchange MtGox after the company issued a statement on bitcoin withdrawals earlier in the day. In it, MtGox set a two day period for testing withdrawals followed by an update on the situation on Monday:
‘’In order to implement our solution to the “transaction malleability” issue being faced by bitcoin exchanges and businesses, we are going to have a 6-hour downtime on all bitcoin deposits and internal bitcoin transfers in addition to the current pause on bitcoin withdrawals. Trading will otherwise still be open as usual. Once the implementation is complete customers will again be able to deposit bitcoin, but we will be doing extensive testing before bitcoin withdrawals are reactivated. We will publish an update on the situation on Monday.’’
The 6 hour window ended as of 15:15 GMT, according to MtGox support staff on IRC. At the time this article was being written (16:00 GMT) there has been no further update on the situation from MtGox. BTC/USD is currently trading at $388 on Gox, up from 310 earlier in the day. This is still a massive 263 dollars below the $641 quote at BitStamp.