Bitcoin is too cheap for its own good

Last week, when Bitcoin’s price hit a new high of $ 1,240, Bloomberg News compared it to a massive bubble. Then over the weekend, on the news that China’s central banks would be banning Bitcoin, the price fell nearly 50 percent down to $ 680 apiece. It was the latest in a roller-coaster ride of Bitcoin booms and busts. But the truth is that the wild swings in price Bitcoin has been experiencing are a natural reaction to the massive global interest in a pool of money that is relatively tiny compared to its government-backed peers. And it’s preventing Bitcoin from achieving its real purpose as an innovative new form of currency.

For the first two years of its existence, when its value was still relatively low, the digital currency…

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