Bitcoin Reborn: As a Financial Wire Service for the $10 Trillion System D?
As a store of value or an asset Bitcoin's shady. Here's why: since the supply of bitcoin is limited and knowledge/use of it is growing (potentially virally) it's the perfect breeding ground for a speculative bubble. In a world awash with scams and financial speculation (a defining characteristic of our time), it was only a matter of time before the pump and dump mobsters moved in. So, for those of you with the stomach to take bets with eastern european mobsters and US financial boiler rooms or if your willing to bet on the fickleness of viral adoption, you might be interested in taking a look at bitcoin as an asset.
The Bitcoin Bubble June 2011, when Bitcoin was trading at nearly $20
Naturally, the Bitcoin bubble collapsed. It hadn't found a true use yet and the entire rise was based on mania. Also naturally, (when the tide goes out you get to see who is swimming naked) the collapse also revealed a large number of scammers.
When the price hit ~$2 a coin or ~$18 m in market capitalization, the big question was: would it recover because it had some intrinsic value or would it collapse to zero. My call was that it would hit a bottom and that's exactly what it did. It's now trading up around $4 a coin. This bounce might actually be the answer to its use as a currency: does Bitcoin have any intrinsic value?
The Currency Test
