Bitcoin’s awesome November: Let’s stop calling this a bubble
As of the middle of November, 1 Bitcoin has been trading above the $400 mark. At the time of writing, the exchange rate is 1 BTC = $422 USD, although that could change before I hit “publish.”
And yet, the currency is just riding a bubble, detractors and skeptics have contended. In April, the digital currency hit a high of $266, having started the month at below $100.
The ensuing weeks supported the skeptics’ stance: Bitcoins tailed off, falling to right around $50 before returning to that $100. The fad had been shown for what it was, some said, because one unit of crypto-currency could not really be worth 266 greenbacks. But here we are again, watching the currency rise rapidly and far exceeding those old peaks. The bubble didn’t stay popped for long, it seems.
Or, rather, it never was a bubble to begin with. Consider Bitcoin’s tumultuous fall: The feds raided the Silk Road, the anything-goes marketplace on the TOR network, eliciting tons of negative press.
Hype inflates bubbles, but there is no hype here. Instead, there is interest from VCs, Chinese investors and small businesses. Again, the price will continue to fluctuate, and Bitcoins could fall just as quickly as they have risen. But do not confuse that with a bubble burst. The currency will have its share of growing pains as it matures, but the upward trend since April should attest to Bitcoin’s strength.