The price of bitcoin continued to evaporate this week, stumbling downwards to new lows it hadn’t seen since 2013. Proponents say that price is not its ultimate value as an anonymous “cryptocurrency,” but bitcoin companies are struggling all the same.
Bitcoin’s price recovered on Thursday after falling to a 15-month low of $173.06 the day before, but have so far has failed to reach $200, according to CoinBase. Bitcoin’s latest price change is part of a downward trend that began when it reached a peak of $1,147.25 in Dec. 2013.
The price of bitcoin is in a bubble just like real estate in 2007 and gold in 2002, and will continue to fall at least until it hits around $150, “the last period of relative stability,” according to Martin Tillier. The market analyst said in a NASDAQ blog post that the bubble that began in 2013 has begun to pop, but if bitcoin falls further than $140, “then a case could be made that the real, underlying value of BTC was questionable before the jump.”
Startups based on bitcoin are feeling the heat. Bitcoin miners are computers that compete to be the first to find solutions to complex algorithms. If they break the code first, they are rewarded with 25 bitcoins, still worth thousands of dollars. The cost of running enormous computer rigs and paying to power them has some bitcoin mining companies ceasing operations.
One bitcoin exchange, CEX.io announced Monday a “temporary” shutdown of mining operations, when its price was still above $260. CoinTerra, a bitcoin mining company operating out of Austin, Texas, is being sued in Utah by a data center operator that claims it owed $1.4 million in back payments. CoinTerra said it would countersue the data center operator, C7, and fight the suit in court.
“At the end of the day, what will be determinative of Bitcoin being a success or failure is going to be whether people are using it,” Patrick Murck, executive director of the Bitcoin Foundation, told the New York Times. “The day-to-day stuff with the price is kind of a side show.”