Crazy Bitcoin Rollercoaster

Author's note: This article is part of an ongoing blog about my adventures in the world of alternate currencies.

It's not so much the Bitcoins but the Bitcoin services that are causing my stomach to turn in circles.

But Bitcoins are doing their best to cause high emotions. They are currently trading for a whopping $838 each on Mt. Gox and $829 on BitStamp. I remember when the price of Bitcoin rose to $265 and it was called a bubble, and it didn't take long for that bubble to pop. This month Bitcoin has held a value of nearly three times that amount for much longer. It's not looking like the price is going to drop back down to what I would consider to be reasonable levels anytime soon.

I noticed a fund on Cryptostocks which was supposed to make money based on the difference between the various Bitcoin exchanges. The idea makes a lot of sense as on some days, like today, you can see differences of up to $300 for one Bitcoin among the exchanges.

20131125 CryptocoinchartsI thought it would be nice to buy some shares in this fund but with the price of Bitcoin being so high I didn't feel I had enough to invest. Plus I've been trying to get out of my Bitcoin denominated securities on Cryptostocks, focusing instead on the Devcoin denominated securities. Earlier today I happened to be logged on to the site checking up on my other shares when I noticed that this fund had closed. OK, glad I didn't get involved.

Last week a fund I did get involved with on Havelock Investments closed abruptly. It was a little bond fund which was paying out at a good interest rate and which I thought might possibly be a suitable replacement for CoinLenders. Well that fund is no longer. It's looking like the only place I will be able to earn a respectable rate of return from lending Bitcoins is BTCJam. There are a few reputable borrowers on the site and I'm testing out the waters with one called MAC.

Havelock Investments is holding an IPO for shares in a fund that pays dividends based on profits made from Havelock Investments. I got to thinking that would be a nice fund to get into but Devcoins were at an all time low and I just couldn't bring myself to sell at those prices. In the end I missed the window and decided to forget it for the time being.

My mining on is going well. I've decided that I will keep half the mined Bitcoins and put the other half back into buying more hashing power. Hopefully eventually I'll mine out my initial investment that way and the rest will be pure profit. It is also reassuring that the price of hashing power is holding steady despite a difficulty increase. It's certainly looking like I can recover my initial investment at any time by simply selling off my hashing power. Shortly after I joined they introduced merged mining so I'm also mining Ixcoins, Namecoins and Devcoins, though the amount of each is quite small. As an added bonus I can buy more hashing power directly with my Namecoins and have been doing so. It's not like I have any other use for Namecoins at this point. At least that's going well… but I've learned to understand that it can all change in a moment.

TradeFortress posted saying he would entertain polite suggestions from CoinLenders customers about how to settle their balances, so I sent him a proposal for making monthly payments for the next year until my balance was paid off with interest. He has not responded yet. He indicated on the CoinLenders thread that he was settling with people who were willing to take an amount in Bitcoins that matched the fiat worth of their balance at the time they deposited, which considering the major Bitcoin rally would return around an eighth of the balance for most customers including me. I'm not really interested in settling that way as I wasn't planning to sell those Bitcoins but I'll probably never see any of them any time soon. It's tough to lose so much that way.

mcxNOW was down for maintenance for a considerable amount of time today, and when I was finally able to get in, I read an announcement that mcxNOW was going to shut down for about a month so that RealSolid could get some rest and figure out how to manage the site better. The site currently has over 18,000 accounts and while the site technically can handle it, RealSolid cannot handle all the support requests by himself. In the time prior to this I'd been watching Devcoins rally somewhat and the price of mcxFee shares had climbed back up to 0.2 BTC (I paid 0.4 BTC each for my most recent 4). I was looking forward to the possibility of selling some for slightly higher than what I'd paid for them and recovering my Bitcoins. Then the announcement came and the price dropped back down to below the lowest I'd ever seen it. Although RealSolid maintains that he's just taking a break and the site will be back even better than it is now with all accounts intact, I'm figuring again the best thing to do emotionally would be to say goodbye to those Bitcoins as well. A small consolation is that if I hadn't pulled them out of CoinLenders to buy mcxFees, they would probably still be stuck there. Out of the fire and into the frying pan.

mcxNOW closing message

So basically, I've pretty much lost the majority of my Bitcoins to date. I either invested in ASICMINER and watched its value plummet, or I lost funds in the Inputs-CoinLenders debaucle, and now the value of my mcxFee shares has just plummeted because RealSolid decided to close out the exchange before mcxFees had a chance to regain their value following the big sale.

The resentment in the trollbox was flying all over the place and this time I can understand it. We're all expected to sit tight on our mcxFee shares which we bought at 0.4 or sell them at 0.09 while not knowing for sure if they'll ever be worth anything or pay out any dividends. There were even people calling for intervention from the government, particularly whatever department handles financial crimes. A few weeks ago RealSolid had some choice words for TradeFortress so now he's getting a taste of his own medicine. The outcry for government intervention always makes me laugh. Where are all those tough libertarian types when they think they're going to lose their money? Suddenly they forget how anti-government regulation and interference they are.

Following the advice of RealSolid's announcement I canceled all my Devcoin sell orders and withdrew my entire balance to my wallet. I'm not sure what I'm going to do with it all now and I may just have to wait for some inspiration to come. I'll likely send it to Vircurex and put up high sell orders there. I may also use it to accumulate more shares in the Devcoin currency bond which has actually consistently paid out dividends for months now. I'm toying around with the idea of buying more shares of VIRTUAL even though I already have plenty. Or perhaps I'll trade them all on Vircurex and then fund MAC's latest loan so I can get some monthly payments with interest. So many possibilities, each one carrying a lot of risk.

In the midst of all this I snagged a writing gig which will pay me in Bitcoins. Finally a writing job where I don't have to trade some other crypto to get Bitcoins. This job is a fairly big one and could potentially lead to other writing jobs. I spent all day today working on it. Then I'll have to decide what to do with those Bitcoins and hopefully not lose them so quickly.

In the mean time I do want to keep up with Devtome writing especially since people aren't writing nearly as much and the generation shares are much bigger–at least they were in Round 29.

Crazy Bitcoin rollercoaster.

Devtome Writers

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