Many forecasters had predicted it, but no one could stop the Bitcoin bubble from blowing up. The e-currency had risen to dizzying heights, but this week Bitcoin had its first true crash.
In recent weeks that the virtual currency was traded as high of US$266 last Wednesday, but crashed in just three days after that height. Last Friday, one Bitcoin is worth just US$54 according to Mt Gox Platform, the Bitcoin transaction manager that covers 80% of all transactions. Because of the crash, the platform had to briefly shut down trading last Thursday.
According to Bitcoin Foundation chief scientist Gavin Andersen in an interview with Agence France-Presse, "There was a lot of short term speculation happening from people who wanted to earn a buck from soaring prices and cash out before the fall. Wild price swings are not good for Bitcoin."
He added, "We believe that as the value of Bitcoin grows and the infrastructure around it grows and matures, the price relative to other currencies will get more stable. That will take a few years and I expect continued chaos and drama in the meantime."
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