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Boom and Bust in Bitcoin

July 7, 2013 at 21:25 by BitcoinNews

Bitcoin prices continued to fall into the 4th of July holiday weekend, hitting a low of $65.4245 on Friday, though as Monday morning began in the Pacific Rim the price rebounded quite a bit to nearly US$80. As long-awaited ASIC mining equipment has finally shipped out and set up at the mining pools, the USD reward per 24 hours at 100MHashes/second has also now fallen to nearly as low as it was in November 2011.

Accordingly, on BitcoinTalk’s mining forum, buyer’s remorse has crept in for some purchasers of Butterfly Lab’s 5 GH/s Jalapeno device—somewhat ironically around the same time as Ars Technica’s “How a Total N00b Mined $700 in Bitcoins” – and estimates of profitability have very quickly grown more conservative. There is also the humorous tale of Adrian Baumann of Riding the Bitcoin Bubble– having bought Bitcoin initially at $4, he journeyed to South America and experienced ups and downs reflecting the boom and bust of the Bitcoin he used to fund his trip.

Now Bitcoin mining has moved on to Gigahashes and Terahashes per second. However, if starter devices like the 335 MH/s USB Block Erupter and the Jalapeno go on sale, or  the price of Bitcoin rises dramatically, small-time mining has the potential to be a marginally-profitable hobby.

From a wider perspective, the Genesis Block reports that significant merchant improvements are planned for Bitcoin 0.9. Furthermore, the largest exchange, Mt. Gox, seems to have completed regulatory hurdles for continuing to do business with U.S. customers, and it has, as promised, resumed USD withdrawals after the two-week hold. Some have speculated this action may also have contributed to decline in price to the mid-$60s over the holiday weekend.

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