An obscure digital currency – used mostly for running drugs and laundering money for dictators – suffered a sudden crash on Wednesday, causing a minor sensation mostly among financial journalists and pundits.

Bitcoin is a currency created years ago by an obscure hacker in the spirit of subversion, to trade goods while dodging the gimlet eye of financial regulators. While theoretically it can be used for respectable online purchases, it is too complicated to buy and maintain for people who aren't online 18 hours a day, so it is used primarily to fuel a shadow economy of vice. It has boomed in value. You can barely throw a rock without finding some pundit opining on how "Bitcoin is the new gold" or how Bitcoin will undercut the modern financial system. Maybe someday, but no time soon.

Bitcoin doesn't work like other currencies. For one thing, it's less like a currency, which are theoretically infinite in number, and more like a commodity, which are limited. No one will print more Bitcoins, for instance. There are currently 10.8m and they'll cap out in 2140. A network of tech-savvy programmers – okay, call them hackers – work on secret algorithms to create and release Bitcoins at their own discretion. Bitcoins are anonymously bought and traded. They have no regulator and no accountability. They're designed to be the favored by people who want to do things on the internet without getting caught.

They're also not easy to obtain. In a piece for the Guardian last month, Arwa Mahdawi explained how bitcoins work:

"If you want to buy Bitcoins you simply go to an online exchange service such as Bitinstant and convert your local currency into the virtual money. These are then stored in a 'wallet,' which functions as a sort of online bank account. You can then go and spend these anywhere that takes Bitcoins to buy anything from socks to drugs."

This doesn't sound very special, and it isn't, except that Bitcoin had the fortune to create a mini-crisis. Instawallet, the online bank account service for bitcoins, was hacked today. Even though this seemed to spur a crash in bitcoins – they went from a high of $147 to a low of $108 today – this hacking may prove to be a benefit. A crash has done untold benefit to ramp up Bitcoin's reputation. A crash means that Bitcoin has finally arrived. Now it is just like respectable currencies.

For a financial punditocracy starved by years without a proper bubble to bemoan, Bitcoin's timing was impeccable if the goal was to look important. A month ago, Bitcoin was worth a modest $32 a share. When Cyprus started suffering its financial crisis, the ample riches sitting in the country for money-laundering purposes found their way to Bitcoin, according to a theory by ConvergEx strategist Nicholas Colas.

There are still only around $800m of Bitcoins in circulation, a tiny amount in a world economy that moves in trillions, and nothing like any serious currency. It is Bitcoin's sudden, enormous increase in value makes it worthy of attention. Bitcoin is a bubble. It can ask for no better advertisement to be taken seriously. Paradoxically, the path to legitimacy is paved by hype.

There is ample commentary to this effect. Alan Safahi, the CEO of a cash payment processor that deals with Bitcoins, lamented that the currency is in a "bubble". Art Cashin, a grizzled veteran of the New York Stock Exchange trading floor, just compared Bitcoin to the infamous Dutch tulip bubble, one of the standard comparisons for any serious modern financial crisis. From tech stocks to mortgage-backed securities, the tulip-bubble comparison is the language of financial crisis.

Bitcoin, known to very few people, used by very few people, is now in heady company, taking its place alongside other once-afflicted currencies like the Russian ruble or the Argentinian peso. Bitcoin, while it was functioning quietly, was boring. Now that it's crashing, it has taken on an air of tragic glamor.

Is it only matter of time before we find out about sub-prime Bitcoin lending or Bitcoin consumer abuses? Features will abound on poverty and Bitcoin, how Bitcoin oppresses inner-city development, and how Bitcoin will raise food prices. Senate investigations into Bitcoin will follow. Hacker heads will surely roll.

Of course, in a rational world, none of that will be written, except perhaps as satire. Bitcoin's crash is less of a currency crisis than an opportune moment for internet wisecracks. Kevin Roose, a New York Magazine journalist who says he bought one Bitcoin at $133, jokingly lamented his impending bankruptcy.

Nothing like a Bitcoin crash to teach you who your real friends are. — Kevin Roose (@kevinroose) April 3, 2013

The best comment of the day was also the one that put Bitcoin in its proper place: as an internet meme. "Bitcoin," opined journalist Micheline Maynard today, "is the Harlem Shake of currency."

• This article was amended on 4 April 2013. The original misnamed an online bank account service for bitcoins as Bitwallet. The correct name is Instawallet.