Monday, 27 June 2011

Bitcoin As An Investment?

There is an economy currently worth over $160 million in the form of the new border-less digital currency called BitCoin. Worth less than one US dollar ($1) at the beginning of this year, Bitcoin is now trading at about $17 - i.e, as at the time of writing this (on June 27, 2011) 1BTC is worth about $17.

According to BitcoinMe, a leading source of information on the new currency:
One Bitcoin was trading for about $0.06 around October 7, 2010. And now.... one Bitcoin is selling for about $20.00 as of June 7, 2011. If our math is correct, that's about a 33,332% Gain in only 8 months.... and, if extrapolated out... at that rate of growth... over the course of one year... That would be an annual return on investment of 583,900%. (source)*
Bitcoin has actually traded higher since, at over $30, but took a major set-back, falling to almost $10, following a recent security breach of the biggest Bitcoin exchange, Mt. Gox. However, the price is steadily rising again and I watched a video in which one Bitcoin bull said he expects it to reach $100 by the end of this year (he did initially think by this summer, but recent developments have put a damper on that).

For a currency that was only created in 2009, it has a short but interesting history, with many calling it a scam, a bubble, a geek's wet dream... But people (geeks and otherwise) have been making money from it.

For comedic effect, here's a video that you may have seen similarly making the rounds online on various topics. However, this one on Bitcoin does demonstrate the real highs, lows and possibilities that Bitcoin can bring.

* Past performance is not necessarily an indicator of future success. This site gives no financial advice. Nothing on this site should be construed as giving financial advice.

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