It’s really funny that I mentioned Mt. Gox recently because it turns out that users of the trading platform are now experiencing difficulties withdrawing their Bitcoins in addition to the known difficulties of withdrawing fiat. Due to some technical difficulty, Mt. Gox has actually halted all Bitcoin withdrawals until the end of the weekend, after which they will release an update. Hopefully the update will be that they figured out and resolved the technical issue.
Mt. Gox used to be the site I checked when I wanted to know the going Bitcoin price. That was at the beginning when they were the only game in town. Now there are many more trading platforms, including quite a few that are local to each country. And for those who don’t really need a full blown trading platform, there are services like Coin RNR–and local versions of it are showing up in other countries as well. The other trading platforms are generally better than Mt. Gox so I’m not sure why people keep trading on Mt. Gox. Perhaps it’s because that’s where they started–maybe some combination of loyalty and nostalgia keeps them there.
Why do I care about what happens on Mt. Gox? I certainly don’t have even one satoshi tied up there.
It’s because when Mt. Gox sneezes the rest of us catch a cold. The Bitcoin price has taken a precipitous dive starting yesterday afternoon and has now dropped to right around $700–a drop of $100 from its formerly nice perch in less than twenty-four hours. And I still need to be able to cash Bitcoins out! This is most decidedly annoying.
I have a weakness for IPOs, especially for companies with business models that resonate with me. Last month I invested in MintSpare’s IPO on Havelock, and this IPO closed just a few hours ago. A couple days ago Havelock sent me an email announcing an IPO for a real estate company in Ohio. The company acquires properties and then rents them out. The company also pays monthly dividends. I have for years wanted to be involved in real estate investing but have always lacked the capital (or the guts to go leverage other people’s money). But for around $4.40 a share I could finally get in, and I wouldn’t have to deal with the details. I could just sit home and collect the monthly dividends in Bitcoin. I couldn’t resist.
The price of Devcoin isn’t all that great right now either, so I started eyeing my remaining fiat funds tied up in Camp BX. I could wait until Monday to see if my money order request gets processed, then prepare to wait at least ten more days to receive it. Or, I could just buy the Bitcoins and send my funds elsewhere instantly. I did not want to buy Bitcoin high and sell them low as I did this past Monday. But, what would be so wrong with buying Bitcoins and then using them as Bitcoins? The price was already starting to drop while the IPO share price was set, so it actually made a bit more sense. So last night I pulled the trigger and bought some at $750, which was on average $50 less than what I’d sold for. I put in a buy order while Bitcoin was still $800 on Camp BX and then went to sleep. By this morning I’d become the proud owner of some Bitcoin, which I sent directly to my Havelock address and used to purchase an interest in Rental Starter.
The ironic thing is that the amount of Bitcoin sent back to my Havelock account was almost the exact same amount that I withdrew after having sold my ASIC MINER interest. For all the good it did I might as well have just left it sitting there for a month. In light of the more recent Bitcoin price drop my only regret is that I jumped in at $750 instead of waiting to buy at $700. However, the fact that I was able to buy at $750 on Camp BX considering its ACH issue is a blessing. At least this time I didn’t lose any money on the trade. Not only that, I now have all my funds out of Camp BX, which is a relief–just in case Mt. Gox’s problem happens to be contagious.
When the price of Bitcoin starts rising or falling suddenly I like to find out why. Last night after placing my buy order on Camp BX I searched for some Bitcoin-related news to explain it. All I could come up with last night was that the Apple app store rejected the Block Chain dot Info wallet app. Apple doesn’t seem to like Bitcoin very much and I believe they may have rejected CoinBase’s app a long time ago. If that was the reason for the drop I figured it would be a small dip.
I didn’t find out about Mt. Gox’s issue until this morning, and it makes more sense. Now Mt. Gox users have problems withdrawing fiat and Bitcoin from their accounts. And being the first exchange and all, when something goes wrong with Mt. Gox, confidence in Bitcoin really suffers, so Bitcoin lost $100 in value overnight. Hopefully this is merely temporary.
While searching for Bitcoin news I came across some interesting articles on Bitcoin itself. One of them predicted all sorts of doom and gloom about Bitcoin. It was written at the time that the Chinese government put restrictions on banks and businesses transacting in Bitcoin and the Bitcoin value had dropped to between $500 and $600. Yup, that was just the beginning of the Bitcoin Meltdown of ’14, the pundit said, further predicting that Bitcoin would plummet to $10 apiece this year. He cited all kinds of reasons why Bitcoin is a horrible currency, mainly around the theme of being unregulated and out of the reach and control of central banks, which those of us who like Bitcoin view as positive features. In light of the fact that Bitcoin made a recovery back to $800, that article is laughable so I include it here for pure entertainment value.
The other article predicts that 2014 will be the year that Bitcoin goes mainstream. While it might miss the December 2014 deadline I have no doubt Bitcoin will go mainstream within the next few years. Every time I turn around some new major retailer starts accepting it–the article mentioned Overstock dot com. Financial institutions are starting to include Bitcoin in their investment funds and politicians running for office are starting to accept it for donations. Even nonprofits are deriving unimaginable benefits from accepting Bitcoin donations. The amazing success of Pensacola homeless outreach Sean’s Outpost is already old news. There are always going to be people who don’t like Bitcoin, but the rate at which people are getting into it and actually using it as currency means its value can only go up in the long run.
If I can hold on through the aftermath of this latest Mt. Gox fiasco I’m sure my Bitcoin will rise in value and probably over-correct to higher than $800. But alas I still need money now, or at least by Tuesday morning, so for better or worse I will be selling some more to pay the bills. It can really stink to need the fiat when there is a dip in Bitcoin price. Still, I much prefer selling Bitcoin at a bargain basement price to make ends meet than juggling around lines of credit I have no hope of repaying any time soon. Griping about the Bitcoin price is a definite improvement in my standard of living and financial well being, so no substantial complaints here. I just hope it doesn’t drop any more and that Monday morning will bring great news from Mt. Gox.