The favored digital currency of disgruntled Europeans, cyberpunks, gold bugs and good, old-fashioned nerds appears to be in free fall.
Bitcoin, a digital currency freely traded on the internet and unregulated by any central bank, plummeted from an intraday high of more than $250 to $156 today, according to
Business Insider.
Still, fans of the currency, which was created in 2009 by a hacker called Satoshi Nakamoto, still have reason to be happy. At the start of the year, one Bitcoin was worth less than $20.
The price began to surge following the bank drama in Cyprus this year as Europeans looked for an alternative to the euro and other currencies being manipulated by central bankers. Until today, it had shown no signs of slowing down.
From the beginning of the year, it's up more than 1,000%. Not too bad for a digital currency whose previous claim to fame was the preferred payment method for buying
illegal drugs online in 2011.
Now it's even being accepted at
a bar in New York.
Regardless of whehter Bitcoins have sticking power as a currency, Josh Charney, an alternatives analyst at Morningstar Inc., warns against looking at the Internet coin-of-the-realm as an investment opportunity.
It's reminiscent of the Dutch tulip mania of the 17th century and the Beanie Babies bubble of the 20th century, Mr. Charney said.
“It's the type of investment where you're not looking for a return,” he said. “You're just buying it because you think it's going to go up in value. That's a poor reason to buy something.”
Mr. Charney does have some advice for fortune seekers looking to make a quick buck, though.
“I heard World of Warcraft real estate prices have gone through the roof,” he said.
