Bitcoin crash?

Bitcoin (Bitcoin on wikipedia) has had a lot of exposure in the media recently due it’s apparent rise in value. Also with apparent troubles in the world economy it is of interest to talk about Bitcoin as a alternative to centrally managed currencies. The recent price rises seems to have triggered some speculation which pushed the price to rise exponentially, and eventually fall.

Bitcoin Price

Charts from http://bitcoincharts.com/

News media has had a lot of stories talking up the price rise and the fall.

This rapid adjustment in price against the dollar has been described as a crash.

If we take a look on a logarithmic chart of the bitcoin price against dollars, we can see similar movements have occurred before. I think this would count as a crash for a centrally managed currency because it would call into question the managing authorities ability to provide price stability.

Bitcoin price history

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One Response

  1. In latest charts it really looks like there is new consensus that the price should be around 100 dollars/ bit coin. People continue to conjecture about the causes of price fluctuations. e.g. attributing a fall in the bit coin price to news about NSA PRISM http://www.coindesk.com/prisms-effect-on-bitcoin-prices/

    It seems like these changes may be mostly influenced by the emergence of new technologies for mining bit coins. Some of these devices can be bought for bitcoins and then generate bitcoins which may lead to stabilising the price.

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