Bitcoin took a pounding in the last 24 hours, dropping below the $500 mark on the popular Mt.Gox exchange before rebounding. As TechCrunch’s John Biggs wrote this morning, “China’s biggest Bitcoin exchange, BTCChina, has stopped accepting deposits in Chinese yuan,” which added to the currency’s decline.
However, the fall of Bitcoin’s value has been underway for some time, making the Chinese news merely component to the larger story: Bitcoin is losing momentum.
What pushed Bitcoin to $1,200 is the precise quantity that is taking it down. Hype, media interest, and speculative hope drove it up, and a lack of hype, media disinterest, and falling speculative buys are driving it down.
Bitcoin is trading at $606 at the time of writing. I made fun of Bitcoin when it initially hit $645: “Currently trading around $645 per coin, it has never been worth more, or generated more headlines that I can recall. The two are likely connected.” Yes.