Bitcoin's back to the wall as it fights to survive

A customer holds a placard while protesting outside a building housing the headquarters of Mt.Gox and its parent company Tibanne Co. in Tokyo on Tuesday, Feb. 25, 2014.
Kiyoshi Ota | Bloomberg | Getty Images

Bitcoin suddenly finds itself in a battle for survival, caught in a worst-nightmare scenario of technical snafus that threaten not only billions of investor dollars but also overall integrity.

The struggles raise questions about whether this is the point where the cryptocurrency fades into cybernerd hobbyist oblivion, as many of its detractors have long suggested, or goes forward as a true alternative to global currencies.

Currency experts say this doesn't have to be a death knell, but it will be up to bitcoin's brightest brains to rebuild the infrastructure so confidence can return.

"This is a threat to bitcoin and digital currencies on the whole because it is something that could erode the trust in the overall idea," said Chris Vecchio, currency analyst at DailyFX. "There's no liquidity in the bitcoin market. There's no more trading activity. Quite frankly, it speaks to a problem with this whole idea of bitcoin as a unit of wealth."