So I may need to revisit my prediction about Bitcoin irrelevance. While they’re still an awful idea as a currency, they’ve had more attention this year than last.
To reiterate the point about how awful they are as a currency, let’s take the price movement over the last few days.
From the peak (yes, I am taking the worst case scenario to illustrate the point) of $236 closing 6 days ago to a recent trade today of $57, taking that as 7 days of change in price, that means the prices of everything measured in Bitcoins has increased by an annualised 15707854302953800000000000000000000%
So yes, not great for a currency. Although the real risk is of a currency destined to be ongoing deflation. Deflation will encourage hoarding, which will encourage price spikes (massive deflation) then profit-taking (crashg implying hyperinflation). So it looks like not only is ongoing deflation a problem, but massive intrinsic instability.