Anorak | Aaaaand the Bitcoin Bubble Is Deflating

Aaaaand the Bitcoin Bubble Is Deflating

by | 11th, April 2014

Robocoin CEO Jordan Kelly, places the company's decal on the Robocoin machine, the world's first bitcoin kiosk (ATM) for buying and selling popular and controversial digital currency, before a demonstration on Capitol Hill in Washington, Tuesday, April 8, 2014. (AP Photo/Pablo Martinez Monsivais) Date: 08/04/2014

I’VE been saying for some time now that Bitcoin is a bubble. And we’re seeing the usual and classic bubble behaviour in its price too. It’s down to just under $400 today :

Bitcoin reached another milestone today, with the cryptocurrency falling below the $400 per-coin mark. Bitcoin sold for over $1,100 inside of the last 52 weeks.

What goes up like a rocket does usually come tumbling back down to Earth.

And economists do have a rough rule of thumb about when something is in a bubble. That’s when people buy and hold it simply because they think it will be worth more tomorrow. That they do this is what makes it worth more tomorrow and thus that price keeps rising.

You can have price rises without this happening, of course: for example, a share might rise in price because the company is making higher profits. This means more income to that share over time and thus it’s

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Posted: 11th, April 2014 | In: Money, News Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink