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April 18, 2014      8:50 AM

Marketwatch: The hazards of Bitcoin

Subject to hacking, extremely volatile valuations

After the Abbott Campaign announced it would accept Bitcoin contributions, Buzz Central did a little research on the product. A recent Marketwatch story shed light on some of the potential hazards of the "asset".

They wrote:

"What’s not great? The bitcoin exchanges are vulnerable to hacking. Just look at Mt. Gox, which collapsed after it managed to lose some 650,000 bitcoins, or Vircurex, which halted withdrawals after a run on the bank, so to speak. And if something like that happens, good luck getting your money back: This isn’t like an FDIC-insured bank account. The Financial Industry Regulatory Authority, or Finra, issued a warning recently that digital currencies are “more than a bit risky.”

"...It’s also volatile as heck, which, come to think of it, seems like a given when you’ve got a currency that isn’t controlled by any central bank. Bitcoin was recently trading around $448, according to the bitcoin price index by CoinDesk. A few months ago, it was more than $1,000. A year ago, it was barely pushing $100. Two years ago, it was about $5.

By Harvey Kronberg