Bloomberg: Bitcoin Plummets 32% in Two Days

We have checked in on Bitcoin from time to time here on the blog. We view Bitcoin as something some people have turned to due to lack of confidence in the banking and financial system. Sort of a modern techno version of gold. But we have also noted that we felt that Bitcoin would struggle to gain mainstream adoption. There are several reasons, but one of the primary ones is that it seeks to operate outside the existing banking system. 

This article in Bloomberg provides an update on how Bitcoin is doing (price has fallen exponentially from its all time high). And the article also points out what we have noted here. That regulators around the world are making it hard for Bitcoin to gain mainstream acceptance. Below some quotes from the article and then a comment.

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"The price of bitcoin has plummeted 32 percent in two days, as the virtual currency’s volatility threatens to undermine its ability to gain mainstream use."

. . . .

"Bitcoin naysayers have been worried that governments around the world will regulate or prohibit the currency to crack down on criminals, and Russia is now moving closer to doing just that. A prolonged price drop could also, at least temporarily, put the future of the currency in question because the equipment and power needed to mine new bitcoins are so expensive. Mining new bitcoins is key to the underlying technology."

"On the flip side, many proponents of bitcoin appreciate its relative anonymity and transaction verification via a public ledger. And despite the recent drop, some of the biggest backers of bitcoin say they aren’t fleeing."

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My added comment:

One of our readers here whom I consider to be an expert on this topic warned me last year that Bitcoin would have big problems with volatility making it less attractive as a "store of value" type currency. That warning has proven to be accurate so far. Bitcoin does have a loyal following so I would expect it will not disappear. It's just that gaining broad mainstream acceptance looks like it will be very tough to accomplish. One of its features that appeals to many of its users (operates outside the existing system) does not help it gain acceptance within that system for a variety of reasons.

This is probably a good time to provide a brief update on the GSD "super currency" technology that Klickex has developed. The latest update I can provide is that this will probably be slowed down some now due to ongoing issues in the EU that need to be resolved and (ironically) due to the strength of the US dollar right now. The technology is still very much in place, but may not show up where you would see if for awhile yet. In a world that still views the US dollar as a "safe harbor" currency,  there is a less urgent need for a "store of value" super currency. If things change, we will let readers here know. Don't look for any news soon on it though is what we would expect right now.