We’ve predicted Bitcoin’s price is going to rise precipitously before bursting. Again and again. And in the past few days alone, the cryptographic currency’s price increase has rocketed up so fast it’s giving consumers nosebleeds — yesterday’s price peaked at $147 before plummeting to $110, and as of writing has climbed back up to $132.
For those of you unfamiliar with typical market movements — no, a $37 spread in 24 hours is not healthy price behavior. This week’s insanity has been pushed by the dumping of Euro’s into the online Bitcoin market, due to consistent uncertainty in Cyprus and other European countries, according to BetaBeat. Yesterday, a temporary outage at Mt.Gox — “the world’s largest and oldest online bitcoin exchange” – and a hacker attack on storage-system Instawallet led to the temporary price depression, according to VentureBeat.
Financial blogging superstar Felix Salmon also wrote a lengthy piece yesterday on Medium about the downside of Bitcoin’s rise, explaining that “it’s incredibly corrosive to try to build a currency on mistrust, as Bitcoin has attempted.”
So it’s a clear sign of mistrust in government and institutional finance when people put their money in a four-year-old, easily-hacked cryptocurrency. But until it is secure and regulated, Bitcoin is not some technological virtue of the people — it’s a money hole.
Once again — I’m predicting the price will fall below $100 within a week or two, and level at around $50 (at most) within a month or two. And given the wild fluctuations in the past few days, these are conservative estimates.
