Despite a Tumultuous 2014, Bitcoin Still Has Value
NEWS ANALYSIS: Bitcoin had a difficult year in which its value declined by two-thirds, but there is still much reason for optimism in 2015.On Jan. 6, 2014, one Bitcoin (BTC) was valued at approximately U.S.$951, according to Coindesk, and has not rebounded to that level. On Dec. 29, BTC was valued at approximately U.S.$312, down by $639, or 67 percent, from its Jan. 6 high. Despite the dramatic decline in value, there is still much reason for optimism in the Bitcoin world. Though the 2014 fluctuation is extreme, it isn't the first time Bitcoin's value has declined. Bitcoin's value was halved overnight on Dec. 18, 2013, from just above U.S.$1,000 to U.S.$500 per BTC. The decline was due to a policy decision from the government of China to ban payment companies from providing financial clearing services for BTC and other virtual currencies. Bitcoin recovered from the 2013 China policy decision, and its value rebounded in January 2014. But a new crisis of confidence emerged in the Bitcoin world. The crisis, which had nothing to do with an external nation-state, was initially driven by Bitcoin's largest exchange, Mt. Gox.
Until February 2014, Mt. Gox was the world's largest Bitcoin exchange and one of the best-known brands in the space. The first signs of trouble at Mt. Gox appeared Feb. 7 when the Bitcoin exchange began to experience withdrawal delays for its customers. That day, the full extent of Mt. Gox's troubles were not yet known, but in the days that followed, a twisted web of facts emerged that would spell doom for Mt. Gox.