Bitcoin Bounces Back Again

Bitcoin fans may recall some "LOL" responses from the cryptocurrency's critics back in December when China instituted restrictions that caused its value to plunge.

Well, for those who stuck it out, it has regained its value, thanks to a well-known mobile and social gaming company. Courtesy of AFP:

The virtual currency Bitcoin jumped back over $1,000 Monday after online gaming company Zynga began a test operation to accept Bitcoin in some of its games.

Zynga said in a posting on Reddit over the weekend that it is now accepting in-game purchases in seven of its online games, including FarmVille 2, CityVille, and Hidden Shadows, through the Bitcoin processor BitPay.

Zynga called the move a test "in reponse to Bitcoin's rise in popularity around the world."

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Comments

[Irish]

Impossible. Business insider assured me that Bitcoin would never go above $1000 again, that the bubble had burst, and that by the end of the year it would be down to $10.

[Paul.]

I believe in Global Warming circles, this failed prediction is referred to as a 'pause'.

[anon]

"Hiding the decline."

[Raven Nation]

Good point. Any day now we should see Bitcoin move up rapidly in value.

[anon]

I, for one, don't find it surprising at all that a currency "bounced back" to (what I would consider) far closer its real value after media hype about said currency died down.

[Paul.]

Zynga shut down by feds in 3...2...

[Corning]

Fuckin fuck fuck!!

I am even making money (very little but I am not losing any) but all the money I don't make by being cautious is giving me a heart problem.

I should just get out and forget about bitcoin.

[Austrian Anarchy]

I never saw the Big Farmville money angle coming. Actually, I had no idea there was Big Farmville money to begin with.

[Episiarch]

Is it as valuable as the in-game money in Diablo III?

[Austrian Anarchy]

I don't know for sure, but there is probably an exchange out there that tracks them together.

[Greg83]

I wouldn't underestimate it. Not sure if it's still the case but I read last year that more people play Farmville than use Twitter. BTC is ideal for this kind of social gaming arena where micropayments are king.

Personally I'm more excited about the Overstock news though.

[Austrian Anarchy]

I used to shop Overstock all the time, when it was new and that cute redhead was doing their commercials.

[Raven Nation]

"Personally I'm more excited about the Overstock news though"

?

[Greg83]

Overstock will begin accepting bitcoins as of Q2 this year. The CEO is philosophically libertarian. The news came out a couple of weeks ago.

[Raven Nation]

OK, thanks. I googled Overstock and got a bunch of news stories about some court decision in CA.

[RishJoMo]

Wow man that makes a LOT of sense dude.

http://www.Anon-VPN.com

[OldMexican]

The virtual currency Bitcoin jumped back over $1,000 Monday after online gaming company Zynga began a test operation to accept Bitcoin in some of its games.

And that level of volatility doesn't give you pause? Doesn't give you the signal that the valuation of Bitcoin is entirely speculative and a bubble? If people went ga-ga over the idea that Zynga (who the fuck are they, anyway?) is accepting Bitcoin, doesn't that tell you that there are a lot of folks out there with too much money (and time... and too few brains) on their hands?

The previous drop was no mere correction, folks. That was volatility. This current surge is no re-valuation. That's volatility. What happened to gold was a correction. What happened to the housing market was a correction. The big difference is that there is still the same gold out there, and more or less the same number of houses. You can still buy and hold gold, in your bare hands. You can still buy and occupy a house, or rent it out. Bitcoin is air. I can have my hand until the final days of the universe and not hit any.

[The Knarf Yenrab]

I usually agree with your posts, but the distinction you're drawing between volatility and market corrections is arbitrary and a mirage of language.

Bitcoin isn't "air" anymore than the copy of MS Office on my desktop is "air." It's a digital, intrinsically deflationary commodity that fulfills particular human needs. Gold has been extraordinarily volatile/corrective vis a vis the dollar for years now, but why this volatility makes people question gold and not fed policy is beyond me. The same is true for Bitcoin, which is even more deflationary than gold, as there's no possibility of an asteroid (or New World) loaded with bitcoin ever being discovered and causing overnight monetary inflation.

The problem with Bitcoin in paleo circles--I mean Mengerian/Misesians like Gary North--is due to a strict interpretation of Mises' theory of the origins of money. Mises uses an historical and inductive argument for an organic and market-chosen money that he meant as a corrective to the socialist theory that money has always been created by the state. The digital era has changed things dramatically, and that includes our understanding of the nature of commodities and of money.

If the market selects bitcoin as currency and eventually as money--regardless of whether or not it is a physical commodity with "intrinsic value" like gold or silver--it is money. If we like bitcoin because it's basically an improved version of paypal divorced from the fed, that's why it's valuable.

[The Knarf Yenrab]

Here's the Man himself from Human Action:

What matters is that a man acquires a good not in order to consume it or to use it in production, but in order to give it away in a further act of exchange. Such conduct on the part of people makes a good a medium of exchange and, if such conduct becomes common with regard to a certain good, makes it money. All theorems of the catallactic theory of media of exchange and of money refer to the services which a good renders in its capacity as a medium of exchange. Even if it were true that the impulse for the introduction of indirect exchange and money was provided by the authorities or by an agreement between the members of society, the statement remains unshaken that only the conduct of exchanging people can create indirect exchange and money.

I'm no Mises expert, but I tend to think that he wouldn't be as negative about Bitcoin as many of the people who're wearing his family's crest on their neckties.

[HazelMeade]

I'm waiting until I can pay my rent, or my mortgage, in bitcoin. And get my salary in it.

I can bootleg anything Zynga has to offer.

[Corning]

I bought at $1.

If I would have followed that advice my $200 would be worth $200,000 rather then the $400 it is worth now.

[Irish]

Boom.

Every asset bubble has three stages; growth, maturity and pop. Growth started in 2011, followed by the maturity stage in 2013 and now the pop stage. The pin that burst the Bitcoin hyper bubble was China.

I predict that Bitcoin will trade for under $10 a share by the first half of 2014, single digit pricing reflecting its option value as a pure commodity play. Miners/speculators will be best served to acknowledge the meltdown has begun, act quickly and take fleeting profit off the table.

I actually agree with the writer of the article that Bitcoin is too volatile to actually work as a transactional currency. It's just that he made this ridiculous prediction under the guise of authoritative certainty, and it's already obvious that his argument that the Bitcoin bubble had popped is not true.

Also, I have to say that you're my least favorite type of troll. You add nothing to any discussion and just roam around asking inane questions. You could have found the article I was talking about by googling "Business Insider Bitcoin" like I did, but because you're only here to behave like an annoyance you decided not to do so.

[Count Negroni]

As it gets used for more purchases, and people bring futures and option trading on line, it'll stabilize a bit.

BI seems to be rather hackish in general (not just about this)

[Count Negroni]

Really wishing I had got in sooner. I heard about it sometime in the summer of 2012, would have been nice.

Got in a bit at $100, though.