International

2014's Worst Currency: Bitcoin

The technology may be fascinating and the promotion may be relentless, but, as a currency investment, Bitcoin performed worse in 2014 than any of the 175 currencies tracked by Bloomberg, according to Bloomberg View.

The cryptocurrency peaked at a value of $1,130 just over a year ago, and plunged 56 percent in 2014. That beats even Ukraine's war-battered hryvnia (down 47.83 percent) and the Russian ruble (down 41.82 percent), which were followed in Bloomberg's troubled-currency list by Ghana's cedi (down 25.67 percent), Argentina's peso (down 23.76 percent), Norway's krone (down 18.04 percent) and silver (down 17.24 percent).

(For the record, the best-performing currency in 2014 was Somalia's shilling -- up more than 55 percent against the dollar -- but that was largely a product of remittance payments by expatriates sending money home.)

At a current value of about $326, Bitcoin isn't dead, "yet it may be mortally wounded," wrote Bloomberg View's Mark Gilbert, noting that Charlie Shrem -- one of Bitcoin's most vocal cheerleaders as vice-chairman of the Bitcoin Foundation and CEO Bitcoin exchange BitInstant -- was sentenced on Dec. 20 to two years in prison for illegal money transfers.

But the key takeaway from Bitcoin's drop "is that money remains at heart a confidence trick. Minor things, like being backed by a country or countries, being minted by a government, and having a physical form you can put in your pocket, still matter," Gilbert wrote. But he pointed out that "real" currencies are just as digital in the financial system as Bitcoin, adding, "Let's hope 2015 isn't the year when we find out that zeroes and ones in a computer aren't really money."

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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