So three weeks ago Bitcoin was worth more than an ounce of gold. I know because about four different people texted me that exact fact like it was going to change my life. On November 29th it touched something like $1,242 on Mt. Gox, and for about 48 hours it felt like every tech forum I read had turned into a trading floor. Now? It's sitting somewhere under $600. Same coin, same month, half the price, and the mood online has flipped from "I'm never working again" to a lot of people very quietly not mentioning Bitcoin anymore.
The short version of what happened, if you weren't following it: the People's Bank of China put out a notice on December 5th telling Chinese financial institutions they weren't allowed to handle Bitcoin transactions. Not an outright ban on individuals owning it, but banks and payment processors got told to stay away, which is basically the same thing in practice once you can't move money in and out easily. A couple days later Baidu dropped Bitcoin as a payment option for one of its services (their Jiasule anti-DDoS product, which is a weirdly specific thing for this to matter to). And the price just fell off a cliff. Not a gentle slide, a real cliff, the kind where you refresh the price a few times in one evening and it's meaningfully different each time.
I didn't buy in at the top, for what it's worth, and I want to be smug about that but honestly it's less "I saw this coming" and more "I never got around to setting up a Mt. Gox account because their signup process was a nightmare." I tried back in the summer, got stuck on some verification step that never resolved, and gave up. Turns out procrastination is a legitimate investment strategy sometimes. A friend of mine did get in, back around $200-something in October, sold a chunk near the peak, and has not stopped talking about it at any gathering since. He also, and this is the part I find funny, still owns some that he didn't sell, and has gone very quiet about that half of the story this week.
What actually bugs me about the whole thing isn't the price swing itself, it's how the conversation around Bitcoin online snaps instantly between two totally certain positions depending on which direction the chart is pointing. Three weeks ago it was inevitable, gold is obsolete, central banks are finished. This week it's a bubble, it was always a scam, anyone still holding is a fool. Neither version has any humility in it and neither one was written by someone who actually knows what China's central bank is going to do next, because nobody does. I've been half-following Bitcoin since I wrote a short post about it here back when it was worth about $5, and the one consistent thing across two years is that people's confidence in their prediction is completely disconnected from how predictable this thing has actually been.
None of this really has anything to do with whether the underlying idea is good, by the way. A currency (or whatever you want to call it, I'm not going to litigate the terminology) that can lose more than half its value in two and a half weeks because one country's regulator sent out a memo is not something I'd want my rent money sitting in, and I say that as someone who thinks the technology under it is genuinely interesting. Those are two separate opinions and I notice almost nobody online is willing to hold them at the same time.
On a completely different note, did anyone else stay up watching the livestream Saturday night for the Chang'e 3 landing? China put a rover on the moon, first soft landing anyone's managed since the Soviets in the 70s, and it got a fraction of the attention Bitcoin did this week, which feels backwards to me. A robot on the moon barely made a dent, but a chart going down made everyone I know personally message me about it. I don't have a grand point to make out of that, it just struck me as a strange week for what counts as big news.
Anyway. If you bought at $1,200 and you're reading this, I'm sorry, and also please stop refreshing the price, it's not going to help.