This week, the value of a Bitcoin reached its all time high and is continuing a slow rise upwards. According to Bitcoin Magazine, Wednesday saw Bitcoins exceed it’s previous all time high of $31.9099 USD set on June 9, 2011. Today that USD value has continued to soar on MtGox to $34.41. This is a notable increase since even the very end of 2012 when the value hovered around $13.50.
Trading volume in Bitcoins continues also to rise as media attention has turned a spotlight towards this entirely Internet-based cryptocurrency. Popular vendors in the social sphere have also started to come on board with WordPress.com, Reddit, and even MEGA accepting Bitcoins.
The 2011 all-time-high didn’t last, however, and Bitcoin’s market saw a massive crash from its height down to even lower than the $7 that it sat at in January of 2012—mostly in the wake of a series of hacks that hit exchanges including MtGox. Since then the currency has been slowly regaining its momentum, mostly with the maturation of different exchanges and other services that have come to take advantage of the market provided.
Now there are a number of services and outlets capitalizing on the useful nature of Bitcoin including payment processors such as BitPay managing 10,000 transactions fraud-free and Bitcoin-Central partnering with Aquoba to permit money-holding accounts. With bitcoins, electronics retail outlet BitcoinStore intends to use the currency to reduce overhead and therefore price to customers allowing them to sell products at near cost.
The market value of Bitcoins is nice; but stability and adoption will win the day
As an indicator of health, market value does show us that people are interested in and trading Bitcoins; but with all economies increasing speculation can mean dangerous things. So while this sort of thing is interesting to the general population, many economics-leaning users are still watching cautiously. To find its place in the market and form a solid niche, Bitcoin needs to be seen as stable by those who intend to use it.
The emergence of further markets (social media sites accepting BTC, payment processors, retail outlets) will help give bitcoins a place in a more pragmatic economy. With an underlying use for Bitcoins—aside from miners and exchange speculators—Bitcoins will find a stable platform to “stand on” that will help spur further innovators and investors to throw their money behind projects that make use of it.
As 2013 stretches out before us, the value may rise, it may fall; but ideally if more websites start accepting it and payment processors stay in the game it won’t matter quite where the value ends up sitting. However, it will be much better if Bitcoin value vs. currencies such as USD stabilizes as much as possible so that potential adopters feel safer keeping part of their earnings in Bitcoin for the sake of using it more often in transactions rather than just as an instant exchange currency.