At midnight, Bitcoin was trading around $234.

By 8:30 AM ET, the virtual currency had surged to an intraday high of $266 – before subsequently crashing 60 percent to a low around $105.

That was earlier this afternoon. Amazingly, it's already staged a big comeback, erasing more than half of its intraday losses.

Now, it's trading just below $200. The chart below shows the big move upward in just the last hour or so.

bitcoin.clarkmoody.com

(Note: There is no x-axis on this chart, but it goes back to April 9.)

The biggest question everyone has had about Bitcoin in recent weeks – aside from how it works – is whether or not it's in a bubble.

After all, the virtual currency has seen a remarkable rise since January, when it was trading below $15.

When the plunge started this afternoon, we saw some interesting defenses of the virtual currency popping up on the Internet.

A Reddit user posted a graphic showing the Spartans' shields from the movie 300 redesigned as Bitcoins with the word HOLD! across the top.

Another Reddit user sought to use technical analysis to explain away today's move.

However, episodes like today's highlight what is arguably the biggest problem with Bitcoin: confidence.