ForexMinute.com – With the widespread acknowledgement of Bitcoin’s volatile nature, now what counts for an investor is the question that ‘where is it heading’. Through this article, we try to recap the ups and downs so far and create a perspective for future of this mined monster.
Some initial accolades to the subject came from the German Bitcoin marketplace bitcoin.de and Fidor Bank AG entering into a partnership, with the online bank agreeing to provide some sort of assurance through a ‘liability umbrella’ to the marketplace operator ‘Bitcoin Deutschland GmbH’. This signaled that the marketplace could prove it’s officially following of financial market regulations, viz. anti-money laundering legislation.
Second was the Baidu.inc accepting Bitcoin for its Jiasule service. Just when it seemed that the moment was smooth, there came a torrent of setbacks hitting the Bitcoin both in value and faith. News about increasing number of malware samples using host systems to secretly mine Bitcoins hit the corner.
Followed by the FBI seizing Silk Road, the website that let people anonymously buy illegal drugs using Bitcoin. As expected, Bitcoin’s value plummeted from Once Bitcoin being at $123 to $105 in a single day.
Then came the major blow, the Tokyo based Bitcoin exchange MT GOX was subjected to over a thousand attacks and the exchange crashed. Later it filed for bankruptcy after 11.4 billion yen ($111.76 million) worth of its trustees’ digital money vanished in an apparent e-heist. Resultantly, China and Russia have severely restricted and practically banned Bitcoin transactions. The latest news in the series being, upon Japanese lawmakers’ urge, that the digital currency should be under public control, the Japanese government decided to consider taking steps to regulate Bitcoin trading.
This is not the end of this roller-coaster. Recently with the word coming from the US secretary of Financial Intelligence, David Cohen that the current level of regulation of virtual currencies, such as Bitcoin, were adequate enough to combat money laundering and prevent terrorist financing, the believers of the crypto currency are again in a fix. Also, the Finance blog Credit Slips reported the US IRS pontificating Bitcoins as property, not currency.
Summing up the series of events in the Block chain issue it becomes notable that the governments and the regulators have a big task on hand in motivating or ostracizing the currency but, ironically this won’t be a cakewalk as this is a challenge of balancing objectives between innovation and transparency.
One may like them or not but these shake-outs are necessary evil. The next time price shores up, it will do so with increased confidence, rather than being held up with everyone twitching nervously, with an anticipation of a crash. These upsets will keep happening, but what is important to us is that they will restore stability and confidence in the long run.
To contact the reporter of the story: Yashu Gola at firstname.lastname@example.org