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Bitcoin Advocate Andreessen: 'Mt. Gox Had to Die'

Outspoken cryptocurrency defender says the shady exchange's collapse was predictable and doesn't pose a significant threat to Bitcoin.
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It’s often said that if something’s not growing it’s dying. But sometimes it’s the other way around. Such is the case with Mt. Gox and Bitcoin, so says Marc Andreessen, venture capitalist and longtime defender of the controversial cryptocurrency.

The former “had to die” for the latter to thrive, he pointedly tweeted yesterday. Mt. Gox’s “former role from early Bitcoin days has been supplanted by better, stronger entities,” he said.

MtGox had to die for Bitcoin to thrive. Its former role from early Bitcoin days has been supplanted by better, stronger entities.

February 25, 2014

Related: Report: Andreessen Horowitz to Raise Another $1.5 Billion

Not surprisingly, the “better, stronger” entity Andreessen suggested Coinbase (all of one whole minute after his now famous “MtGox had to die…” tweet) as a safe-bet Mt. Gox alternative for Bitcoin buyers and sellers.

“People learning about or trading Bitcoin should deal with reputable, well-run, well-backed companies such as Coinbase (our choice),” he tweeted.

The multi-millionaire's Silicon Valley-based venture capital firm Andreessen Horowitz backed Coinbase, a San Francisco-based Bitcoin wallet provider, to the tune $25 million last December. Andreessen Horowitz has reportedly invested nearly $50 million total in Bitcoin-related startups to date.

Andreessen, who penned a passionate defense of Bitcoin in The New York Times on Jan. 21, went on to back-to-back rapid-fire tweet that his confidence in the volatile virtual currency remains unshaken by Mt. Gox’s headline-hogging epic crash and burn.

Related: One-Time Bitcoin Exchange Giant Mt. Gox Collapses Amid Insolvency, Trading Allegedly Suspended

“Every important new technology has birthing pains,” he said, “PC did, Web did, Bitcoin does. Our enthusiasm and commitment unchanged.” He should know. In 1993 he co-authored Mosaic, the first widely used web browser, the one essentially credited for popularizing the Internet across the globe.

In a statement to CNBC yesterday, Andreesen compared Mt. Gox to MF Global, the high-profile commodities brokerage firm that filed for Chapter 11 in 2011 after billions in customer funds went missing.

“Mtgox has been obviously broken and possibly outright crooked for months. As seen in trading spreads. This is like MF Global. Not some huge breakdown of the underlying technology or other exchanges. Bitcoin protocol is unchanged and other bitcoin exchanges and companies doing fine.”

He also took to Twitter to point out that “BTC is trading at the same level it was… two months ago.”  

In wake of MtGox shutdown, BTC is trading at same level as it was... two months ago. (Up strongly since shutdown itself.) Markets work.

February 26, 2014

As of 12:47 p.m. ET today, Bitcoin prices hit $580.66, according to the CoinDesk Bitcoin Price Index. The price sank lower than $500 last Monday, its lowest price since November, when it rose to more than $1,200. 

If you’re thinking of joining the long list of Bitcoin haters predicting that the fall of Mt. Gox will lead to Bitcoin extinction, Andreessen has a choice tweet for you, and maybe even some special retweets, too:

I will happily retweet all retractions and apologies from people who wrongly forecasted death of Bitcoin as result of MtGox collapse :-).

February 26, 2014

In related news, Mt. Gox CEO Mark Karpeles posted a message on the exchanges website, which we’re a bit shocked to see still exists. His statement, which is as vague as the statement that appeared on the site yesterday, reads:

February 26th2014        

Dear MtGox Customers,

As there is a lot of speculation regarding MtGox and its future, I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues.

Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.

Mark Karpeles

Meanwhile, Japan’s highest government spokesperson Chief Cabinet Secretary Yoshihide Suga today announced that Japanese authorities and the country’s Ministry of Finance are actively investigating allegations that the Tokyo-headquartered Bitcoin buyer/seller trading platform lost some $409 million worth of Bitcoins belonging to more than one million Mt. Gox customers. The announcement comes on the heels of news that federal prosecutors in New York reportedly subpoenaed Mt. Gox this month.