Would you want to store your money in a virtual currency that spikes in value 25% in a day? Oh, it’s great when it’s going up. But gravity will prevail soon and bitcoin will come crashing back to earth leaving Bitcoiners with huge losses.
Zero Hedge opines this could be a government-induced bubble to deliberately destroy bitcoin, and I’m not going to say they’re wrong.
Which line item on the Fed’s Balance Sheet is ‘Virtual Currency Transactions’… what better way to destroy an up and coming currency competitor than to blow a bubble in it and explode it? Because the fervor for BTC now will only turn to all out loathing and disgust if and when one of the major buyers in the illiquid market decided to take out all stops to the downside (if only Mt Gox had stops that is) and send the price of BTC, expressed in paper money and thus analyzed not as a currency but as an asset, plunging.
We don’t know who started bitcoin. There is no central pricing authority. And as ZH mentions, there are no stops. Transparently traded commodities have circuit breakers. If the prices drops or falls more than a certain percentage, trading is halted. Bitcoin has no stops, so when the crash comes it will be quick and ugly.