Anybody that has been paying attention to Bitcoin as of late is aware of the crypto-currency’s sudden, massive increase in value compared to the dollar. Proponents of Bitcoin are pointing to this climb as proof that the currency is a real contender in the currency market and detractors have been saying that the rise is a bubble that is bound to burst. As an advocate of crypto-anarchism I have a keen interest in crypto-currencies, which offer a means for individuals to perform transactions in a fairly anonymous way. With that said I don’t see how this rapid growth in Bitcoin’s value is anything but a bubble. Rapid rises in value, such as a 50% increase in a 48 hour period, tend to be followed by a rapid drop in value. There are many potential reasons for this. Players of the stock market will sometimes perform what is called a pump and dump. Through various methods these players will artificially increase the price of a held stock and sell it when they predict the game is up and the price will soon fall. I wouldn’t be surprised if we later find out that somebody was performing a pump and dump style game with Bitcoin.
The part of me that wants to see crypto-currencies become pervasive wants to see Bitcoin continue to increase in value. Unfortunately the cynical asshole side of me is fairly certain that Bitcoin is in for a major drop in value at some point in the future (it may be tomorrow or it may not happen for a while). I am going to put myself on record saying that Bitcoin will experience a rather notable period of devaluation compared to the dollar. Since Bitcoin is established I don’t believe the devaluation will be as severe as the last period but I believe it will bit harsh enough to create a great deal of butthurt for those who have recently entered the Bitcoin market.
With that said, I base this prediction entirely on a consultation I had with Odin and a ghost claiming to be Ludwig von Mises. Anybody who has studied Norse mythology knows that Odin likes to fuck with people and the apparent ghost of Mises had a very minor, and potentially fake, German accent leading me to doubt its claim. Take my prediction with a grain of salt and wash it down with copious amounts of alcohol.