So this week has been a genuinely unhinged one if you own any Bitcoin, and I own a stupid, tiny amount of it, so I've been refreshing exchange charts instead of doing literally anything productive.
Quick recap for anyone who ignores this stuff: back in April, during that whole Cyprus banking mess, Bitcoin spiked to something like $266 before crashing back down to around $100 in the space of a day. I bought a small chunk right after the crash, mostly as an experiment, mostly because I was curious whether the whole idea would still exist in a year. Fast forward to late November and the price is suddenly north of $1,200 on some exchanges, partly on China demand, partly because Baidu had started letting people pay for one of its services with it. Everyone I know who'd never mentioned Bitcoin once in two years was suddenly texting me about it like I was some kind of expert. I am not an expert. I have $40 worth of an experiment sitting in a wallet file I definitely should back up more than once a year.
Then last Thursday the People's Bank of China put out a notice telling Chinese banks and payment processors they weren't allowed to touch Bitcoin transactions anymore. Not an outright ban on individuals owning it, just banks and payment companies pulling out, but that distinction didn't matter much to the price. It fell off a cliff. I watched it go from over a thousand dollars down toward the $600s within about a day on some of the exchanges, which is the kind of price movement that would get a stock halted for the rest of the week. Baidu backed off accepting it shortly after. It's bounced around since, and by the time you read this it's probably done something else entirely, because that's the whole deal with this thing right now.
What actually strikes me about this
It's not really the price swing itself, people who follow currencies knew this was coming eventually. What gets me is how much the entire value proposition depends on a handful of governments deciding to more or less leave it alone. The whole pitch of Bitcoin is that it's decentralized and doesn't answer to any central bank, and then one central bank issues a memo and the price does a 40% swan dive in a day. That's not really independence from monetary policy, that's just a currency that happens to react really badly and really fast to monetary policy it doesn't like.
I'm not selling my $40. Honestly at this point it's less an investment and more a thing I check the way some people check sports scores. But I did finally admit to myself this week that I'm never going to seriously mine any of this on my own hardware. I looked into buying one of those ASIC miners a few months back, the ones that do nothing but hash SHA-256 all day, and between the price of the hardware itself and what it would do to my power bill I decided I'd rather just buy a tiny amount outright and call it a day. My apartment runs cold enough in December as it is without adding a space heater that also happens to mine imaginary money. My landlord already thinks I'm asking for too much when I request the radiator get bled once a season, I'm not about to also explain crypto mining to him when the electric bill doubles.
Anyway. If you bought in near the top a couple weeks back, I'm sorry, that's rough, and if you're one of the people who texted me in a panic on Thursday asking if it was "over," no, probably not, but also I genuinely have no idea and neither does anyone else confidently claiming they do. This is still very much the wild west phase of the whole thing. Ask me again in a year whether $40 was a good idea or a dumb one.
For now I'm just going to keep the wallet file backed up somewhere that isn't just my desktop, which, embarrassingly, is where it's lived since April.