Digital currency has been down, up, and down again this morning.
Bitcoin is experiencing a period of extreme volatility today, as rates for the digital currency dropped from $139/bitcoin to $109.71/bitcoin in less than three hours. That represents a 21.5 percent decrease in value at the lowest rate this morning. The value of bitcoins started to recover slightly around 1:00pm CT, dropped again toward the $109.71/bitcoin rate, and rose back to the low $120/bitcoin area as of this post.
This morning's Bitcoin drop comes amid major news that's tangentially related to the currency. Silk Road, the sprawling online criminal enterprise that used bitcoins as its sole means of currency, was shut down and had its domain seized. That action comes as Silk Road's founder, known online only as “Dread Pirate Roberts,” was identified by the Department of Justice as Ross William Ulbricht and arrested in San Francisco on Tuesday.
There is no direct evidence linking Bitcoin value fluctuation with the Silk Road shutdown. The Bitcoin drop could as easily be due to the currency popping up prominently in the news and sparking activity. News of the Silk Road shutdown hit the wires shortly before 11:00am CT, and currency-tracker Bitcoinity shows Bitcoin's initial decline beginning roughly an hour afterward (between 12pm and 12:30pm CT).
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| Volatility of Bitcoin rates (in USD) over time (CT) this morning. |
Today's 21.5-percent drop pales in comparison to the Bitcoin crash of April 2013, when the currency lost half its value within six hours as an anonymous owner was giving away bitcoins on reddit. Another noted "Bitcoin crash"—which bottomed out in October 2011—saw the currency slowly lose more than 90 percent of its value over the course of four months.
Courtesy: arstechnica
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