The latest Bitcoin crash is the third in as many months and is causing considerable of concern among people who own large amounts of the virtual currency.
Bitcoin was supposed to supersede the current cumbersome methods of transferring money which are all tied directly, in one way or another, to the banking system – delays, regulations and fees included. Bitcoin offered a cheap, seamless and immediate alternative to this.
Unfortunately, it seems that the dream of owning and using unregulated, untraceable currency is beyond reach. Especially in light of the recent decision by the Tokyo based MtGox to suspend customer withdrawals of Bitcoin till further notice.
While MtGox said they were suspending the customer withdrawals due to the fact that fraudsters were using Bitcoin to con people, Bitcoin proponents argued that the issue was with the way MTGox and others chose to confirm transactions, and not with the currency itself.
Before the latest Bitcoin crash, it was holding in the range of $900 to $1000 for most of 2014. It slumped to a low of $500 over the weekend, bouncing back to the $700 mark on Monday.
To add to Bitcoin’s woes, Russia prohibited the use of Bitcoin completely on Sunday. The Russian Prosecutor General’s Office said in a statement: “Systems for anonymous payments and cyber currencies that have gained considerable circulation — including the most well-known, bitcoin — are money substitutes and cannot be used by individuals or legal entities.”
Back in December of last year the Chinese government also cracked down on the use of Bitcoin in the country following a mega-crash of the currency.
Will the third significant Bitcoin crash in three months finally spell the end for the online currency? Or will it recover from the mega-crash which saw its value cut in half?