Have Mt. Gox and China Affected Demand for Bitcoins?

What is the future of bitcoin?

What is the future of bitcoin?  CC by 

Jonathan Waller

 

Only a couple of months ago, one of the largest bitcoin exchanges in the world collapsed. The closure of Mt. Gox led many people to believe that the virtual currency was about to meet its demise. The bitcoin community has remained strong, but faith in the virtual currency has clearly withered since Mt. Gox went offline. What does this mean for the future of the virtual currency?

No Signs of Imminent Death of Bitcoin

Charts from Google Trends show that global search index for bitcoins fell from 74 in February to 54 in March. The currency has received about 34 searches so far in April, which would suggest that this month’s search volume is about the same as last. It seems that the Mt. Gox scandal has hurt the bitcoin community, but it is still faring well.

Global monthly searches for bitcoin

Global monthly searches for bitcoin

There are other issues that may be affecting faith in the virtual currency. Search volume for the word “bitcoin” have also fallen since December, when China announced that it was going to start cracking down on the currency.

However, the currency may rebound on the fears from China. A recent post from CNBC states that bitcoin has become less apprehensive about new Chinese regulations. BTC Trade was informed that a local bank would no longer process transactions with it. However, other bitcoin exchanges have stated that they received no such communication. This could mean one of two things:

  • Bitcoin exchanges are about to be universally banned in China, but not all of them have been notified yet.
  • BTC Trade is not in compliance with the new regulations for some reason, but the other bitcoin exchanges are.

Either way, it doesn’t appear that the virtual currency is about to implode.

Community Remains Strong

The bitcoin community is still rallying behind the virtual currency. They seem confident that it will continue to grow strongly in the months to come.

Despite the recent fiascoes, the role of the bitcoin has continued to evolve. The currency was once believed to be exclusively used by hardcore technocrats and criminals. However, new developments have shown that the currency is much more than that. It clearly caters to a very diverse market. NewsBTC recently announced that over 4,000 small businesses around the world have started to accept the virtual currency in their stores. Some people have even created bitcoin paper wallets like the one below.

This is a picture of a bitcoin paper wallet.

This is a bitcon paper wallet  CC by 

Hannu Makarainen

 

It is unlikely that the currency is going to suddenly die as it becomes increasingly popular. It appears that the setback from Mt. Gox was only temporary, but that doesn’t mean that the currency won’t face another setback in the months to come. Time will tell what the fate of bitcoin is, but it will probably play a key role in the future of the global economy.

About the Author: Kalen Smith

Comments are closed.