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Bitcoin Rebounds Despite Silk Road Closure

Bitcoin Rebounds Despite Silk Road Closure
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Oct 8, 2013 3:30 PM PDT    Text size: 

SAN FRANCISCO — While the FBI’s closure of the illicit online market place Silk Road earlier this month sparked speculation about the fate of Bitcoin, with many hedging on its potential collapse, the cryptocurrency has shown a surprising resilience.

Bitcoin was the Silk Road’s sole form of accepted currency. And, with sales totaling $1.2 billion worth of Bitcoins over the last two years, many believed it to be the currency’s main life line.

Although Bitcoin took a hit following the shutdown on the Bulgaria-based BTC-E, a prominent cryptocurrency exchange, dipping to $75 per Bitcoin (from $125), it had already rebounded less than a week later, again approaching $125.

Bitcoin’s survival suggests that it will indeed continue to exist apart from the Silk Road, and, perhaps equally as important, gives it an opportunity to shed some of the negative associations it garnered as the “preferred currency” choice of the drug dealers, illegal pornographers and even hit men that frequented the web’s bustling black marketplace.    

“As if there were any question before about whether there would still be Bitcoin use outside of Silk Road, the answer is yes, absolutely,” said Marco Santori, the chairman of the regulatory-affairs committee of the Bitcoin Foundation, a nonprofit advocacy group.

Santori added that the closure of Silk Road was what Bitcoin needed to address its longstanding “PR problem.”

With an image overhaul, Santori and others believe that mainstream payment gateways may eventually accept it, or one of the dozen cryptocurrencies that exist, as a legitimate form of payment — something that has prevented some adult companies from jumping on the Bitcoin wagon, despite its allure as an anonymous and untraceable form of currency.

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