The Bitcoin isn’t doing so hot price-wise, but the numbers aren’t all doom and gloom.
Digital currency news site Coindesk just released its State of Bitcoin 2015 report, covering highlights from the previous year with an emphasis on Q4. While the report noted that the price of a Bitcoin plummeted 85% since January 2014, it also highlighted increased trade, transaction, and venture capital investments in the Bitcoin economy.
In January 2014, a Bitcoin was worth $951.39, the report says. As of this writing, a single Bitcoin is worth less than $300, causing Bloomberg to call Bitcoin the single worst performing currency of 2014. Bitcoins are no longer the star investment that some proponents once considered them, but this may have been good for the Bitcoin economy.
As Bitcoins become less of an asset, people are finally beginning to spend them. Total bitcoin trading volume on Bitcoin exchanges increased by more than 50% since the beginning of 2014. Venture capitalists invested $335 million in new Bitcoin startups the same year, while companies like Microsoft and Dell began to accept Bitcoin payments. Both of these trends indicate that while Bitcoin may be low, there are many that still have faith in the currency.
Even so, Bitcoin as a currency is far from out of the woods. It’s been less than a year after Bitcoin’s then-largest exchange, Mt. Gox, halted trade after noting thousands of missing customer Bitcoins. Now, history is nearly repeating itself now that a hacker has broken into Bitcoin exchange Bitstamp and stolen millions of dollars in Bitcoins. If Bitcoin owners can’t trust their coins in an exchange, they might be more likely to keep them safe in their digital wallets instead of helping the exchange trading volume continue its spike.
Illustration by Nigel Sussman for ReadWrite