Bitcoin, the virtual currency beloved by dreamers, speculators and criminals, is on a new upswing as the popular Mt. Gox exchange showed it trading slightly above $200 late Tuesday afternoon ET:
As the chart shows, Bitcoin is trading on other exchanges at a price closer to $185 (trades on Tokyo-based Mt. Gox come at a premium, possibly due to its recent legal and regulatory troubles). But, by whatever metric you pick, Bitcoin is soaring — up over $60 this month alone. And the current price is up more than $150 from the low of $50 it hit after a spectacular crash in April.
The gains are also notable because Bitcoin has weathered a series of wrenching shocks in the last six months: the FBI’s takedown of Silk Road (a criminal marketplace that relied on Bitcoin); the feds’ seizure of millions from Mt. Gox; an ugly lawsuit that blew up plans for a series of U.S.-based Mt. Gox franchises.
So why has the currency proved so resilient? As with the April crash (and those before it), no one has a definite answer. But the recent steadiness may be the result of support from established investors like Fred Wilson and Second Market, and the efforts by the Bitcoin Foundation to tame political hostility in Washington. And the currency’s October boost may stem from Chinese internet giant Baidu’s decision to accept Bitcoins as payments.
Bitcoin’s resilience may also be due to an ever-growing number of start-ups and developers who are making the currency easier for merchants and for everyday people. These include San Francisco-based Coinbase, which offers both an easy-to-use wallet and an exchange where users can buy and sell small amounts of Bitcoin instantly.
This week, Coinbase introduced an intriguing new payment tool: a widget that lets readers of the massive online news and discussion site Reddit pay each other with Bitcoin at no transaction cost. This means that if someone leaves a clever comment or story, other readers can quickly “tip” them with a trickle of Bitcoins.
Some commentators on the Bitcoin sub-Reddit, where hardcore devotees of the currency gather, expressed skepticism about the Coinbase plan, noting that such technology already exists. Others responded that Coinbase is easier to use and will encourage more people to get Bitcoin wallets.
Correction: an earlier version of this article stated that Coinbase is based in New York, not San Francisco.