So, Tuesday was a bad day for Bitcoin. Within hours, the original cryptocurrency plunged in price from roughly $13,000 USD per 1.0 BTC to just over $10,000—and that’s down from an all-time high of $19,000 in mid-December.
It was a shock to the system that, perhaps because of the investment mania that’s surrounded Bitcoin in recent months, has upset many. For example, on Tuesday night the top-voted post on the half-a-million strong /r/Cryptocurrency subreddit was the phone number for the US National Suicide Prevention Lifeline: "This sub has gone from mania -> depression in record time," one top-voted comment on the post reads.
In response to the mini-crash, articles wondering if the Bitcoin bubble is in mid-burst began trickling in. For a moment, there was a pervasive feeling that this really might be the beginning of the end for the world’s first cryptocurrency. It would have been a short life, beginning in 2009, but a full one, with the many newer—and in some ways more capable—technologies it inspired, like Ethereum, Monero, and Zcash, presumably surviving it (although they followed Bitcoin’s lead and took a dip on Tuesday, too).
One bitcoin was worth $800 USD one year ago, and one bitcoin is now worth $11,381 even after Tuesday’s plunge. Bitcoin has crashed several times in the past, and it’s notorious for its volatility. A mini-crash may seem catastrophic now—instead of par for the course—because the recent wave of mainstream attention has led to a massive influx of new investors who might not know much about Bitcoin’s history. We’re all now along for the Bitcoin ride.
What is definitely finished, however, is the notion that Bitcoin is a stable place to park your wealth; that Bitcoin can be a store of value instead of a currency is a theory that some elements of the community have retreated to in the last year since Bitcoin’s slow network and high fees have made it seem less feasible as a payment system. Tuesday showed that Bitcoin’s value is as volatile as ever, but there’s magnitudes more at stake now than even a year ago due to increased investment. The system shocks hit harder, but overall, there's still a lot of money behind Bitcoin.
As for the future of Bitcoin, it’s anybody’s guess, but Tuesday does raise one very important question: If Bitcoin’s not a stable store of value, what is it? Is it money, or is it a stock? Is it a ledger for land deeds? What the hell is this thing anyway and what is it good for?
Navel-gazing about Bitcoin’s future aside, many people have recently bought into Bitcoin due to its skyrocketing price, and presumably many of those people just lost a lot of money. That must feel pretty bad, but while we can't predict the future, the past tells us that Tuesday's dip was just classic Bitcoin.
The National Suicide Prevention Hotline is toll-free in the US and available 24/7 at 1-800-273-8255, while suicide.org has a list of international suicide hotlines, including Canada and the UK.