Bitcoin is anything but a certain investment. Its value has climbed mountains and filled troughs more than most traded commodities over the past year, going from a near freely available curiosity for the tech savvy, to the £100 plus per-coin, digital currency it is today.
Since Bitcoin’s first big value spike earlier this year, which saw it treble in value in just a couple of weeks to hit a high of $237 (£147), it crashed hard and then settled to a continual rise and fall between $70 and $140, growing and dipping on a relatively regular basis. However recently, it’s exploded and we’re already beginning to push $200 again.
While this is great for anyone that’s been sitting on a stockpile of coins for just such an occasion, as with the previous Bitcoin mountain, it could very well mean that we’re heading for a cliff and the question remains for those with Bitcoin collections: when do you get out?
What’s surprising about this most recent spike though, is that theoretically, you’d expect the value to fall. After all, drug marketplace Silk Road was just shut down and it was one of the world’s biggest Bitcoin enabled marketplaces. And yet looking at Blockchain’s stats, that early October closure caused a $4 dip in the currency’s individual worth and then helped foster an explosion.
Perhaps this is partially to do with the press that came from the Silk Road closure leading to increased exposure for not only Bitcoins, but for the online drugs marketplace? It’s not like Silk Road is, or was the only option for people looking to buy “controlled” substances online; there are alternatives that have picked up the slack.
KitGuru Says: Any economics students or professionals want to give us an insight on why any of this happens? Would be good to hear someone’s learned opinion on it.