It was with equal parts of relief and smug satisfaction that the Bitcoin faithful watched prices recover over the last week, briefly rising into the $540 range. While the price recovery was a relief, the news wasn’t all good for the virtual currency.
Amazon finally settled persistent rumors that they were planning on accepting the virtual currency, by issuing a clear statement via recode.net that the online retailer would not be accepting Bitcoin anytime soon, suggesting the company’s priorities lie elsewhere. It’s long been speculated that Amazon is considering building its own electronic payment processing system to compete with Visa and Mastercard.
In other Bitcoin news this week, the now defunct Mt. Gox exchange asked a Japanese bankruptcy court to amend its petition to reorganize into a request to liquidate. That comes after the CEO of the bankrupt exchange, Mark Karpeles, refused to travel to the United States to face questioning in the US bankruptcy case.
The Bitcoin community has weathered suspicion, government overreach, and regular doses of scorn and ignorance from financial insiders.
The peculiar twist to the Mt. Gox story has been the difficulty in tracking down exactly when and how the theft of the Mt. Gox Bitcoins actually happened. The puzzle of the loss, combined with rumors of a free-spending lifestyle by the CEO of the company, has given rise to a persistent feeling in some Bitcoin forums that the disappearance may have been an inside job.
Overseas, China is discovering that banning Bitcoin and enforcing a ban are two very different things. While the Chinese government can stop banks from accepting any Bitcoin transactions, nothing really stops users of Bitcoin in China from switching to an exchange outside the country and carrying on business as usual. Complicating the situation are conflicting announcements from state media about the exact deadlines, with some claiming the deadline is April 15th while others saying the only official deadline is December 5th. The confusion may indicate a progression of understanding by Chinese authorities, who may be starting to see some of the advantages of cryptocurrency — and want to give themselves more time to evaluate their next moves.
There’s an interesting video about the Bitcoin community called The Bitcoin Uprising, that is actually not bad for a production by the financial entertainment industry. Even more interesting is watching financial commentators on cable trying to understand Bitcoins. They seem to grasp it has something to do with computers — after that it’s a deep, dark well of mystery.
I’m going to admit that I find the price recovery in Bitcoin a bit surprising given the long, slow decline we saw last month. While sharp price moves, up and down, are routine, once a long-term trend takes hold it usually is fairly consistent. Perhaps the lack of any new bad news is the underlying surprise that boosted Bitcoin prices over the last week.
So far Bitcoin has managed to outlast the predictions of doom by economists and Wall Street giants, and efforts by banks and governments to have it banned. The Bitcoin community has weathered suspicion, government overreach, and regular doses of scorn and ignorance from financial insiders. To this point the Bitcoin community has come through it all with a widening base of acceptance.
Regardless of the price, Bitcoin is here to stay. How it evolves from here will be one of the more interesting developments in the history of currency, which has remained relatively unchanged for over a 100 years.