Don’t Stop Believing (In Bitcoin)

October 18, 2013 By: Kevin Xu

Bitcoin doubters and naysayers may have cause to reevaluate their criticisms – and investments.

This week has seen bitcoin rally in the face of economic calamity, and its acceptance as more than just a commodity, but as an actual currency valued for the purchase of goods and services.

Many had thought that bitcoin’s strength was in its ability to facilitate illegal and (pseudo) anonymous transactions for illegal drugs and services. The shutdown of Silk Road, the Amazon of drugs and shady dealings previously this month, caused bitcoin to drop in value.

However, it has since rebounded. Part of bitcoin’s rise in price stems in part to the valuation and confidence in the U.S. dollar. The government shutdown had created an air of uncertainty in the dollar, which coincided with bitcoin’s increase.

The price of one bitcoin opened this week at $128, and the growing uncertainty of the U.S. debt deal bumped the price of bitcoin to $145.

Another factor was Baidu, China’s Internet conglomerate likened to Google, accepting bitcoin as a payment method for Jiasule, an Internet security service that protects against DDoS (distributed denial of service) attacks.

Chinese bitcoin exchange, BTC China, has seen demand from China double.

Bitcoin may just become a very viable payment method for the online space as more and more merchants and service providers realize that the margins on taking bitcoins are much more favorable in comparison to accepting the tried and true credit card.

As of now, the price of bitcoin on Mt. Gox is sitting at $165 – and bitcoin believers are sitting pretty.