Yesterday, Oct 16, 2011, ExchB officially stopped all transactions and closed up shop. The exchange bills itself as “the 1st US Bitcoin Exchange” and now they’ll take that title to the exchange grave with them as they lock their virtual doors for the last time and shoo their customers out. This happens during a time when the bitcoin market is losing a lot of steam—and a lot of volatility as well—over the past month it’s fallen from $4 to almost $2.60 per BTC.

A statement has appeared on ExchB’s website outlining the features of the closure and assuring customers that their bitcoins will be refunded to them without much delay:

ExchB is closing.

First, we would like to assure our customers that all funds and Bitcoins deposited with us are available for withdrawal.

Over the past few months, we’ve enjoyed bringing a high-quality, easy-to-use exchange service to the Bitcoin community. We believe Bitcoin has a bright future and look forward to the many developments that are sure to come. Unfortunately, the cost in time and money of running ExchB and the funds required to take it to the next level will exceed our available resources.

As of October 16th, 2011, we have stopped trading and deposit activity on the exchange.

All funds and Bitcoins must be withdrawn by October 24th, 2011. For customers who have made large funding transactions, we may request additional information before processing withdrawals. If this is the case, you will receive an email with additional details. Bitcoin withdrawals will be manually approved regardless of amount.

This change of heart happens after ExchB managed the feat of adding cash deposit through Wells Fargo and Chase banks. In their notice, they state that were working on a Bitcoin merchant technology to help increase stability and security of bitcoin transactions and are now looking for someone to continue that research.

In the bitcoin ecology, Mt.Gox is still the largest of the large, accounting for much of the trade volume; whereas ExchB has always been the larger of the small exchanges. Their loss will probably not be a huge blow to the community; but the diversity of exchanges has always been a good thing for any market. Having less of them means that more customers will flock to exchanges such as Mt.Gox or Tradehill.

Perhaps we’re starting to see where the consolidation is going to go.

Also perhaps this will give an opening for exchanges such as Ruxum or Forex trading outfit Bitcoinica to grab up some of the market that ExchB is giving up.

This time we don’t need to worry about some disaster precipitating the loss of an exchange such as happened when Bitomat.pl lost their Bitcoin wallet or the hack of MyBitcoin.com. This looks like a general going-out-of-business sort of dissolution.