eCurrency Experiment Gone Bad: Bitcoin Crashes

Photo Credit: Agence France PresseMany saw it coming, but that didn’t stop the Bitcoin bubble from bursting: after rising to dizzying heights, the digital currency suffered its first true crash this week.

The price of the virtual “geek” currency had soared through the stratosphere in recent weeks, trading for a high of $266 on Wednesday — only to come hurtling back to Earth in just three days.

By Friday, a single Bitcoin was worth just $54, according to the Mt. Gox platform, which manages 80 percent of the Bitcoin transactions and had to briefly shut down trading Thursday.

“There was a LOT of short-term speculation happening” from people who wanted to earn a buck from the soaring prices and cash out before the fall, Bitcoin Foundation chief scientist Gavin Andresen told AFP.

“Wild price swings are not good for Bitcoin.”

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