Bitcoin has been hit by a spate of negative publicity in the last week or so, but while doomsayers will be rubbing their hands with glee yelling out “I told you so”, those who genuinely believe in the cryptocurrency will be quietly optimistic that this could all turn out rather well.
Bitcoin’s latest troubles began almost two weeks ago, when it was revealed that Charlie Shrem, the entrepreneur behind the exchange website BitInstant, was arrested on money laundering charges related to the infamous Silk Road online black market. It’s said that Shrem “knowingly contributed to facilitating the drug sales on Silk Road, earning substantial profits along the way”. In the wake of his arrest, BitInstant was promptly shut down, while Shrem resigned his position as the as vice chairman of the Bitcoin Foundation.
Move forward one week and Bitcoin was hit by a triple whammy, with Apple declaring war on the cryptpocurrency by removing the sole surviving Bitcoin wallet app, Blockchain, from its App Store, without any reasonable explanation. Just two days later, it was reported from various sources that Russia had “outlawed” the cryptocurrency, declaring that “the monitoring of the use of virtual currencies shows an increasing interest in them, including for the purpose of money laundering profit obtained through illegal means.”
“Russia’s official currency is the ruble. The introduction of other types of currencies and the issue of money surrogates are banned,” reported RT News.
Things finally came to a head at the weekend when Mt.Gox, the world’s best well known Bitcoin exchange, was forced to suspend all withdrawal requests. Once the go-to exchange for the virtual currency, Mt. Gox has struggled with government seizures and technical glitches in recent months, and many commentators are now speculating that this could be the beginning of the end.
Bitcoin getting stronger by the day
With so much negative press in the last couple of weeks, it’s little wonder that Bitcoin’s value has fallen by almost 20 percent in the past few days. The cryptocurrency hit a low of $659.18 on February 8, before rebounding slightly to $679.30 at the time of writing, according to Bitcoinaverage.com.
It’s tempting to think that Bitcoin is doomed to fail, as Timothy Lavin of Bloomberg confidently predicted not so long ago, but that’s missing the point completely – the point is that all of this bad news only confirms how strong Bitcoin is right now. If something as powerful as Apple bans the use of Bitcoin with its own devices, it shows us that it’s terrified of how strong Bitcoin has become. It’s the same thing in Russia – for whatever reason, lawmakers there don’t want people using Bitcoin, and they’re so worried about its rapid adoption that they’ve tried to declare it illegal – although, as TechCrunch points out, it’s likely to be only companies using Bitcoin and located in the country who will be targeted.
Some might argue that Mt. Gox’s fall from grace is further evidence of Bitcoin’s impending doom, but this theory can also be dispelled. Mt. Gox was just the first of many Bitcoin exchanges, and there are dozens of more reliable and better organized pretenders (like Kraken, Coinsetter, or CoinMKT) that are ready to step into its shoes.
The real reason that Bitcoin has been hitting the headlines so often is not because it’s weak. Rather, it’s because Bitcoin has never been stronger, supported by a growing community of users scattered all over the world, on the cusp of being legitimized by the US government, with it’s use becoming more widespread by the day. With so many people staking so much in Bitcoin, it’s little wonder that any snippet of information – good or bad – makes the headlines. The “bad news” just confirms the “good news” that Bitcoin is getting stronger by the day.