Speed Reads


Bitcoin has fared even worse this year than the Russian ruble

The ruble has had such a horrible year that Russia's central bank just hiked interest rates to 17 percent to stem the currency's depreciation amid tanking oil prices and international sanctions. But at least as of Monday, one currency has done worse than the ruble's 46.5 percent slide against the U.S. dollar in 2014: Bitcoin.

According to Quartz's calculations, the virtual currency embraced by libertarians, the black market, and — at least at the start of the year — Wall Street investors, has lost 52 percent of its value versus the greenback. This chart from CoinDesk illustrates Bitcoin's drop against the U.S. dollar:

Bitcoin's bad year — Quartz calls it "the worst investment of 2014" — is due in part to government crackdowns on sites that used the cryptocurrency for illicit transactions, as well as shaken confidence in Bitcoin after the collapse of exchanges like Mt. Gox and Flexcoin. But the big lesson for "libertarian technologists," says Quartz's Matt Phillips, is that "money derives much of its value from its government support, in that the government has the power to make it legal tender. That is, the government says not only that currency can be accepted, but it must be accepted."

Still, Bitcoin enthusiasts and promoters are bullish for 2015. The currency will be volatile for a while, mostly because so few people use Bitcoin, Bobby Lee, head of Bitcoin trading platform BTC China, tells CNBC, "but theoretically, with wide adoption, the circulation value should be 100x or 1,000x what it is today."