Bitcoin is taking it on the chin following the FBI seizure of Silk Road, a popular – and partially hidden – marketplace for drugs and other items generally outside the orbit of the law. As TechCrunch reported earlier today, about $1.2 billion in Bitcoin flowed through Silk Road, resulting in a nearly $80 million commission for the service.
Bitcoin is responding as you would expect, as a core market that accepted it has been taken down, the federal government hemming in on its slice of the web: By rapidly shedding value.
Bitcoin traded as high as $145 per coin at the end of September. Today, it’s trading around the $119 mark. RealTimeBitCoin is reporting a buy-sell spread of $118.10 to $119. This squares with another data source tracking the Mt. Gox Bitcoin-Dollar exchange rate, which places the current trading range at nearly precisely the $118 level.
Here’s a chart as compiled by Clark Moody:
That’s quite the drop.
And it is not really that surprising: With Silk Road out of the picture for the foreseeable future, if not forever, quite a few folks now have Bitcoins burning a hole in their digital wallets. If they can’t use them, what to do? Sell, obviously. And an exodus of that scale pushes prices down.
There is also a factor of fear at play. Bitcoin has accreted to itself a modicum of respectability in recent months, failing to collapse as some predicted, and instead showing off a level of price stability that has almost surprised. Until today, of course.
Bitcoin started the day at around the $139 mark. At its current level of $118, Bitcoin has lost around 15% of its value. Keep watching the charts. [Update: Bitcoin is trading around the $113 mark, and continues to decline. To stay up to date, click here.]
Top Image Credit: Hamed Al-Raisi