The price of buying a single bitcoin on the currency's most active exchange, MtGox, has been dropping at a rate of around $1 every week or so since the value of bitcoin peaked in June at nearly $30 (£19). At the time of writing, it's currently sitting at around $2.84 (£1.80) -- a drop in value of more than 90 percent.
"I am not trying to cause a panic here," said one poster on Reddit's Bitcoin subreddit, "but the value of bitcoin has dropped very low today with huge spikes. I do suspect it will hit $1 mark this week maybe even lower."
Others in the same thread echoed the poster's concerns. "I think we'll be lucky if it stays above USD parity in the short term, because the actual market activity for it is so tiny," said one. "At the moment there is no need to use bitcoin, as anything that can be bought for BTC can be bought for 'real money' elsewhere," added another.
Of course, some would argue that the drop represents a return to the currency's "true" value, following rampant speculation in the wake of widespread press attention earlier in the year. The problem, according to Technology Review, is that "media coverage has had an outsized impact on the value of bitcoins, even when it has not had a major impact on the number of transactions conducted."
http://www.wired.co.uk/news/archive/2011-10/18/bottom-drops-out-of-bitcoin
