Mundo Bitcoin: Right now bitcoin is going through rehab and a nasty divorce

By Victor Hernandez

This weekend has been one of the worst for bitcoin in recent history, with a 20% price drop due to Mt.Gox incompetence (I don't think Russia affected its price one bit). But it certainly is not the worst -it was far worse with the China ban in December of 2013- and, for that matter, I see it as a necessary cleanup in the bitcoin ecosystem.

Think of it as bitcoin going through rehab and a nasty divorce at the same time.

On one hand, bitcoin is getting rid of a lot of the speculation that made its price volatile. It is also getting rid of most of its illegal stigma.

And on the other hand, bitcoin seems to be finally saying goodbye to Mt.Gox, a site that while it made bitcoin grow originally, it ended up hurting it by not getting its act together.

Sure, we'll probably see the price of bitcoin fall to, oh... 650? 630 Dollars a piece? But in return we will get a cleaner, sober ecosystem with less risk attached to it.

So when the US starts regulating bitcoin, triggering the creation of new exchanges, and business and consumer growth in bitcoin transactions, the price will go up again. Only this time there will be a lot less FUD (fear, uncertainty and doubt).

Because one thing is clear: Even desperate Mt.Gox users are not abandoning bitcoin. They're abandoning Mt.Gox.

Proof of it is the curious phenomenon taking place today at bitcointalk.com. Desperate Gox users offered to trade their bitcoins stuck inside Mt.Gox in exchange for 85% or less bitcoins outside Gox.

Yes; Gox users offered to sell 1 mtgoxBTC for 0.85 regular bitcoins paid to a wallet outside Mt.Gox.

Some of them asked for fiat currency (Dollars, Euros, etc), but some of them asked for bitcoins. The ones who wanted butcoins instead of cash wanted to get out of Gox, not out of bitcoin. Meaning the bitcoin trade will continue.

How long is this rehab/divorce going to last? My best guess is a couple of weeks given how long it has taken bitcoin to recover from previous crashes. After that, I see a bright future for bitcoin. And a price increase, of course.


The best bitcoin exchange in the US is Coinbase. Get your account here.

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