The Bitcoin Crash Begins

Nothing lasts forever. Image via Flickr/zcopley

After peaking at $266, bitcoin took a tumble on Wednesday afternoon. A big tumble. At the time of this writing, one bitcoin was worth $201 $193 $187 $156… you get the point. Obviously, everybody's freaking out. Don't go jumping off of buildings just yet, though. The end is far from near.

Bitcoin is crashing, and that's a bummer, especially for all of the people who decided to buy when it was hovering around $250 not long before the bottom fell out. That doesn't mean that the market won't catch the currency before it's beyond repair. In fact, this might even be a good thing for bitcoin. A recovery after the rocky afternoon would prove to investors how resilient bitcoin is. It has to recover first, though.

The crash is not a good thing for bitcoin, but it's also not the end of the world. (Image via Clark Moody)

But before getting into speculation about how and why bitcoin can recover, let's talk about what's causing the crash. It'll be hard to tell for sure so soon after impact, but I'll do my best to help you parse the many theories already hitting the web.

Reason 1: People Stopped Talking About Bitcoin

This is only sort of true. Based on Google Trends data, there was a significant drop in online conversation about bitcoin over the course of the past week. This is after three straight months of conversation volume increasing. A commonly held theory for why bitcoin's value spiked during this same time period is that the increased chatter boosted demand, and since the supply of the currency is fixed, the price would rise accordingly. Just because people started talking less about bitcoin (again, according to Google) doesn't necessarily mean they started wanting it less, though.

Read the rest over at the new Motherboard.VICE.com.