Bitcoin triumphed in 2013, crashed in 2014 but what does 2015 hold for the digital currency? In this super-speedy two-minute video Garrick Hilleman, an economic historian at the London School of Economics, gives his take.
Topics discussed in the video include:
The price of Bitcoin
The price of Bitcoin has continued to drop in 2015. On January 1 a Bitcoin was worth $313 USD, it’s now worth in the region of $240.
The price briefly climbed back to around $300 in March, spurred on by encouraging Bitcoin volumes trading data. However, those gains have been erased in the last two months.
Bitcoin has lost around 25% of its value in the first half of 2015.
Venture capital investment into Bitcoin start-ups
Venture capital is pouring into Bitcoin companies in 2015, despite the falling value of the currency. Circle, a digital currency payment processing company, closed a $50m funding round on 30 April.
Andreessen Horrowitz, a world-famous venture capital firm, was among the investors in mysterious cryptocurrency start-up 21 Inc (21e6).
Despite it being an early stage start-up, 21 Inc (21e6) closed an $116m funding round in March.
The continued use of Bitcoin by criminals
Silk Road founder Ross Ulbricht was jailed earlier this year for crimes including drug trafficking and conspiracy to commit money laundering. Even after Silk Road’s closure, Bitcoin is struggling to shake off its shady reputation.
Cyber attacks against Bitcoin exchanges have continued in 2015. Bitstamp, an exchange based in Slovenia, reported that is lost $5m in a hot wallet hack.
Bitcoin wallet downloads
A key metric for measuring Bitcoin adoption is the number of new wallets issued each month.
According to figures from Blockchain.info 465,000 new Bitcoin wallets were downloaded in March 2015 – a slight increase on the previous month.
The number of new wallets issued per month has hovered around the 500,000 mark for the last half year.
New Bitcoin merchants
Bitcoin merchants are the shops/outlets that accept payment in digital currency.
2015 has seen the launch of more complex financial products built on the Bitcoin currency. A growing market is emerging for Bitcoin options and derivatives trading.
Digital currency hedge funds are also starting to spring up. BitShares is one of a number of companies offering investors the opportunity to hedge against digital currency price volatility.
Media coverage expectations
A lot of media coverage relating to Bitcoin in the first half of 2015 focused on the Silk Road trial.
Of the major business newspapers, only the Financial Times is planning to scale-up its coverage of Bitcoin in the second half of 2015.