Virtual currency hit by panic selling

<p>The value of Bitcoin halved due to panic selling.</p>

Panic selling has halved the value of virtual currency Bitcoin in the last 24 hours.

Bitcoin has gained an increasing amount of media coverage in recent weeks and fell from a high of $260 (£169) for each Bitcoin, to about $130 (£84) in just six hours.

According to a report by BBC News, Bitcoin's main exchange MTGox has struggled to keep up with the volume of trade, with the body claiming it is working hard to improve to avoid problems occurring again in the future.

"People started to panic, started to sell Bitcoin in mass (panic sale) resulting in an increase of trade that ultimately froze the trade engine," it said.

MTGox added it has experienced a bump in trading volumes that it was unprepared for over the course of the last few days.

The sudden drop in Bitcoin's value could persuade investors of the benefits of trading with traditional currencies such as sterling and the US dollar.

Sterling recently rose on the back of promising industrial data for the UK economy, though its position remains weak compared to the dollar and other world leading currencies.

Learn about the sterling and forex trading at City Index.

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