Large fluctuations in the value of bitcoins have led to criticism of bitcoin's legitimacy as a currency.[17][61] An April 2013 article in The Atlantic drew attention to bitcoin's deflationary bias which, unlike a regular currency, encourages hoarding. [62] Forbes contributor Louis Woodhill suggested that, rather than money, bitcoins are "the cyber equivalent of rare postage stamps" or other collectibles.[63]
Nevertheless, there is evidence that bitcoin is being accepted by some mainstream businesses[64] and hoarded by individuals.[65] Bitcoins have gained traction in Argentina as an alternative to the official currency.[66] There is also growing awareness of their usage in black market transactions, frustrating bitcoin's promoters. Despite its volatility, bitcoin is currently being used on the black-market Silk Road website[67] and by Iranians to evade foreign currency sanctions.[68] In 2013, the U.S. Treasury extended its anti-money laundering regulations to processors of bitcoin transactions.[13][69]
Financial journalists and analysts have speculated that there was a correlation between higher bitcoin usage in Spain and the 2012–2013 Cypriot financial crisis, through which bank deposit levies as high as 40% could have been placed on bank deposits; conceding that bitcoin is serving as a sort of financial haven for some European savers.[70][71][72] Nick Colas, a financial analyst, claimed a rally in the price of bitcoins was “One hundred percent...due to Cyprus,” and that “It means the Europeans are getting involved.”
In contrast, as of 2013, the use of bitcoin as a haven is limited for large amounts. As Colas also claims, “Bitcoin is good if you want to make a deposit of between $1,000 and $10,000. But the liquidity is just not there in the system for multimillion dollar transactions...”[73]