The last two weeks have been tough on Bitcoin. Most of the bad news has been related to Mt. Gox. The embattled exchange has been long known to delay and delay fiat withdrawals. It then recently suspended Bitcoin withdrawals citing transaction malleability and a major DDoS attack as the reason. A couple other exchanges briefly suspended Bitcoin withdrawals just in case, but promptly resumed service once the operators were satisfied that transaction malleability wasn’t going to be a major issue for them. Mt. Gox never got around to restoring its Bitcoin withdrawal ability and the latest is that the exchange is now in bankruptcy proceedings and dealing with at least one major lawsuit with probably more to follow.
The impact of all of this on the Bitcoin price has been horrendous. In the space of a couple weeks Bitcoin went from trading for $800 to dropping below $500. But I believe it has finally reached the point where bad news from Mt. Gox is no longer hurting the price. Or, all the Gox bad news has been priced in.
This morning I checked the Bitcoin price on CoinRNR and was delighted to watch it climb more than twenty dollars in just a few hours. Bitcoin is finally climbing out of the gutter.
Probably the best part of this news is that for Bitcoin the “gutter” meant that it was only worth a little less than $500. The only reason this seems like the gutter is that Bitcoin at one point reached over a thousand dollars, and then hung out at $800 for quite a while, so $500 represents a considerable drop in price. But without that context, $500 for a Bitcoin is very respectable. A little over a year ago, people thought $265 for one Bitcoin was insane (and it was at the time as this high quickly dropped back down). Who would have dreamed at that time that in just a year’s time, $500 would be a low for Bitcoin?
Respectable or not, I much prefer $800 or even $1000 Bitcoins to $500 Bitcoins. I’ve held off on trading out any Bitcoins during the worst of this low, and thankfully I haven’t needed the income. I have the resources to ride out this low for at least another week or two, perhaps longer.
Apart from my own desire to get more fiat for my Bitcoin, it’s wonderful to see Bitcoin’s recovery in light of the last two weeks. Besides Mt. Gox’s issues there has been other bad news about Bitcoin here and there–issues with the coding, various countries and even US regulators issuing all kinds of warnings, other sites providing Bitcoin services being hacked and losing users’ funds, and even Warren Buffet saying he doubts Bitcoin will ever go anywhere (though personally, I think he’s just hoping to trash talk it down so he can buy low). Despite all that, Bitcoin only lost less than half of its value and it is as I write this quickly regaining what it lost. Bitcoin is proving once again its resilience. Despite what the Warren Buffets of this world think, Bitcoin is proving that it is not going anywhere, that it is a currency (or at least an asset) in demand, and that it can handle some major bumps along the road. It is also a game changer in the way money and finances work, but that is the subject for another article altogether.
Go Bitcoin, Go!