There have been a handful of bad news items concerning Bitcoin in the last week, but the market is not treating the news as a judgment on the basic value of the currency, which popped past $300 on Friday and keeps heading upwards.

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In the last week alone, the Bitcoin world has been bedeviled by a major theft, a bankruptcy tied to a member of the Bitcoin Foundation as well as a $4 million scam that suckered 1,000 Chinese investors. How has the market reacted? By taking off like never before.

On Friday, the virtual currency blew through $300 for the first time and now it looks set to smash the $400 mark. Here’s two screenshots. The first shows Bitcoin rates in US dollars at various exchanges, and the second shows the currency’s trajectory over the last three months on the Bitstamp exchange (Mt. Gox is already over $400 but trades there come with a premium due to liquidity worries):

Bitcoin chart screenshot

Bitstamp screenshot

So what does all this mean? It’s hard to say. Even by the roller-coaster standards of Bitcoin speculation, this type of jump is unprecedented.

The currency’s rise despite the series of negative news items shows that, more than ever, it is less susceptible to one-off incidents that, in the past, might have called into question its entire legitimacy. Meanwhile, Bitcoin is being hailed by serious investor and technology experts as not just a currency but a permanent protocol too.

On the other hand, Bitcoin suffered a spectacular crash in April that saw its value fall by around 75 percent to $50, and there’s no reason that couldn’t happen again.

  1. I think bitcoin adopters’ thinking is key to whether it is all a huge bubble or not: http://www.x-btc.com/1/post/2013/11/420-bitcoin-bubble-pop-coming-one-bitcoin-hoarders-strategy.html

  2. A 75% loss! Imagine having just spent €1,000 buying BTC… And to be left with just €250. I think the bubble will eventually burst. Some sort of digital currency is inevitable. A newish one based on Bitcoin is Peercoin or PPC is its abbreviation, it seems to be getting more popular by the day. It is said to be a bit safer but who knows. Roll on Crypto Currencies!


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