World Economy

Bad Year for Bitcoin

Bad Year for BitcoinBad Year for Bitcoin

In 2024, Bitcoin was declared one of the worst performing assets of any kind. It has fallen almost 66% in value from its high point in early 2014. That is worse than the fall in oil prices, the Russian ruble and the Ukrainian hyrvnia. This price drop has taken place despite large companies like Microsoft accepting Bitcoin payments for online games and services in the US.

Any good news Bitcoin had this year however was well and truly drowned out by the bad. The failure of the largest Bitcoin exchange, Mt Gox in February demonstrated beyond a shadow of any doubt that the appearances of professional and safe service in the Bitcoin world were illusory. Then came the closure of a number of DarkNet drug markets, including Silk Road 2. Like the closure of the original Silk Road cryptomarket, Bitcoin was central to their operations. At the time of its seizure, Silk Road 2 was turning over nearly US $100 million a year in Bitcoin traded drugs, The Conversation reported.

In Australia, the Australian Crime Commission launched an investigation into the role of digital currencies in crime. The banks stopped dealing with Bitcoin businesses and the Australian Tax Office declared Bitcoin to be an asset and not a currency.

The challenge for digital currency promoters still remains that the benefits of these currencies are largely lost to the public, whilst the negatives and their association with crime, are only too visible.

To be fair to the cryptocurrencies, outside of regular online credit card transactions, the concept of digital payment of any sort has struggled to gain acceptance in the market. This ranges from Amazon’s Amazon Coin to Google Wallet which has so far failed to get any serious traction or revenue. Even though early signs point to Apple’s mobile payment system sparking some interest in this area.