I reported last week on the ridiculous explosion in Bitcoin value over the preceding weekend, where we saw it jump over $100 in just a couple of days, leading a high around the $270 mark. However in the 24 hours and days that have followed, it’s been nothing but bad news for Bitcoin trading.
Mere hours after I posted the piece, the foundations of Bitcoin began to wobble and by the late evening we saw a drop off of well over $100. Ultimately it took a few days for the currency to stabilise a little, but by then the value had dropped to a mere $80 per Bitcoin. Of course if you’d bought a load of the currency back when it was $10-$20 per coin, you were still going to do well if you cashed out, but no way near the amount that you would have netted if you’d done so on the Monday high point.
Since then Bitcoin has fluctuated around, rising again quite rapidly after the first correction, hitting a high point of around $110 towards the end of the week, but today sees the value falling again to around $75.
Like the Dotcom and housing market booms, it looks like the Bitcoin bubble has at least been pricked. The burst doesn’t quite seem to have taken full effect, but if it follows the trend of the Dotcom bubble burst, then it’s headed for a continued downward spiral.
Along with individuals, businesses have felt the pinch from the Bitcoin crash. Drugs marketplace Silk Road has had many of its sellers stop new orders and prevent users from finalising payments, as until they do, Bitcoin values are hedged at the pre-crash rates.
Of course though, one thing to take from this whole thing is that while the perceived value of Bitcoin has dropped, its ability to be used as a currency has not. It’s still a near instant transaction system, that is unregulated and difficult to track. While each individual coin might not be the over-inflated gold mine that it once was, the currency itself still has value in the role it can play. Adoption is higher than ever.
Here’s hoping that now Bitcoin has risen and fallen, it’ll eventually balance itself out to usable levels and become far more adopted.