Razzies, Russia and Raining On The Miners’ Parade

Bitcoin Tracker | Week 56

2015 has really not been the Year of the Bitcoin, at least so far.

After dropping below $300 last week to $268.7, bitcoin dropped even further this week to a low of $178, before pulling itself back up to $203.25 according to the PYMNTS.com Bitcoin Price index. Bitcoin started the year at $311, and has been dropping like a stone ever since. It’s declined 41.3 percent since Jan. 1 and 76.5 percent since Jan. 1, 2014.

Even Russia is starting to sour on Bitcoin. The Russian government, apparently not busy enough with the collapsing ruble and the drop in oil prices, has blocked access to multiple sites related to bitcoin. Why – because it’s aiding the growth of the shadow economy, they claim, further proving the point that criminal use cases are incredibly sticky.

All eyes also turned this week to the Silk Road trial aka Bitcoin Reality TV. A Federal Agent testified that he infiltrated the Silk Road and earned $1,000 weekly. That was followed by an admission from the Department of Homeland security they were convinced that the CEO of Mt. Gox actually ran the site, believing that Mt. Gox and the Silk Road worked in tandem. That was music to Silk Road defense team since they argue that the founder of the Silk Road to be just the fall guy for the operation.

And speaking of TV, comedian Jimmy Fallon had a few yuks over BitStamp, asking the rhetorical question “if you can’t keep your money safe in a Slovenian bitcoin exchange, where can you?”

Perhaps in space with Xapo’s new offer. And we are not making this up.

Never a dull moment in the world of bitcoin.

As always, if you have any news you’d like to share, please send it our way at contactus@pymnts.com.

On the Plus Side …

BitStamp opened back up for business this week after comedian Jimmy Fallon joked about the service, saying, “If you’re not safe to keep your money in a Slovenian bitcoin exchange, where can you keep your money?”

Jan. 15, 2015 – Bitcoin securities provider Xapo announced new updates focused on increasing their security offerings and will work with Satellogic to secure the bitcoin in outer space.

Jan. 15, 2015 – Coinplug is going to issue prepaid bitcoin gift card to 24,000 convenience stores across South Korea. 8,000 7-Eleven stores have already agreed to participate.

Jan. 13, 2015 – Bitcoin evangelists say that the current price of bitcoin shouldn’t be a concern and that if bitcoin is a bubble, we shouldn’t draw any major conclusions about the intrinsic value of it until the bubble has fully moved through the market, which will take time.

Jan. 10, 2015 – Bitcoin operator BitStamp reopened for business and became the brunt of a little friendly ribbing by comedian Jimmy Fallon in the meantime.

On the Dark Side …

Last year at the 2014 PYMNTS Innovator Awards bitcoin won an award for being the Most Disruptive Innovation, however, CNN correspondent believes that this year it deserves a “Razzie.”

Jan. 15, 2015 – CNN Money digital correspondent Paul La Monica says that if they “handed out awards to financial assets like they did to movies, then Bitcoin would definitely be the winner of the Razzie for worst currency.”

Jan. 14, 2014 – The bitcoin crash over the last 12 months is a larger drop than both the ruble and crude oil.

Jan. 14, 2015 –The bitcoin price decline is creating a bit of a panic in the bitcoin mining world as they can no longer cover their costs.

Jan. 14, 2015 – According to the Wonkblog at The Washington Post, bitcoin isn’t a currency “it’s a Ponzi scheme for redistributing wealth from one libertarian to another. At least that’s all it is right now. One day it could be more.” The blog also pointed out that many venture capitalists are quick to point out that the technology could still be revolutionary, but of course they’re going to say that when they’ve already bet so much on it, it claims.

Jan. 14, 2015 – Many of the features that kept the founder of the Silk Road, Ross Ulbricht anonymous may now be turning against him now that bitcoin isn’t as anonymous as previously believed. But for law enforcement and prosecutors, this is a definite plus.

Jan. 13, 2015 – Russian telecommunications regulator Roskomnadzor blocked access to five bitcoin-related websites because the cryptocurrency is contributing to the growth of the shadow economy.

Jan. 9, 2015 – The chief scientist at the Bitcoin Foundation, which is the closest thing to the cryptocurrency’s central bank, has given a warning to ordinary people, advising them to avoid bitcoin for now, telling the Financial Times, “It actually is dangerous and people should be aware it’s like the early Internet. If you lived through time, you remember lots of press articles came out saying don’t give Internet companies your credit card details. But the Internet grew past that. Bitcoin will be the same way. Over time, I will stop saying to people, ‘Don’t use it unless you’re technically proficient enough to keep your computer secure.’”