Leonid Bershidsky, Columnist

The Glitch That Will Help Kill Bitcoin

The current level of Bitcoin activity is low enough that a few thousand "invested" individuals can prop up the exchange rate. For outsiders, however, it looks increasingly as though Bitcoin should be viewed as an experiment, a test case. Other electronic currencies will rise, and be more widely accepted, after all the regulatory and technical issues are resolved.

February 11, 2014 at 11:17 AM EST

By Leonid Bershidsky

Leonid Bershidsky, formerly Bloomberg Opinion’s Europe columnist, is a member of the Bloomberg News Automation Team. He recently published Russian translations of George Orwell’s “1984” and Franz Kafka’s “The Trial.”

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As the world's first, and most popular, cryptocurrency, Bitcoin has by now suffered every possible setback a payment project could encounter. It was implicated in a huge drug bust when the Federal Bureau of Investigation took down the Silk Road electronic exchange. It has experienced regulatory pressure in forms ranging from trading restrictions in China to a recent threat of a complete ban by the Russian authorities. It survived a scare involving an apparently Ukraine-based operation taking over close to half of the currency's "mining". It absorbed Apple's decision to remove all related software from its app store. Now, a top Bitcoin exchange, where the cryptocurrency could be traded in for government-issued money, has hit a snag that forced it to stop Bitcoin transfers to outside addresses.

In the face of all this adversity, Bitcoin remains amazingly resilient, which could mean one of two things: Either it is here to stay, or the people who invested in it during a speculative bubble are reluctant to accept losses and still able to prop up the market with their trades.

Before it’s here, it’s on the Bloomberg Terminal

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