Bitcoin stalls after hitting record prices in 2013

A Bitcoin sign in a Toronto shop window in May, in better times. Photograph: Mark Blinch/Reuters

After skyrocketing to more than a thousand dollars in price late last year and attracting global attention, bitcoin, the leading digital currency, has stalled.

Figures obtained by Reuters show that while wallets cyberspeak for accounts are being created at a steady clip, many of them are empty.

Analysts also provided Reuters with data that shows liquidity in the cryptocurrency remains limited.

Bitcoin, a virtual currency created through a mining process where a computers resources are used to perform millions of calculations, has been hailed as revolutionary because of its lack of ties to a central bank and its potential as an alternative to credit cards for paying for goods and services.

However, the currencys volatility has slowed broader acceptance. The price of bitcoin has plummeted roughly 50% so far this year. It most recently traded at $356.26, down from a peak of $1,163 in December 2013.

Two of its primary appeals the lower transaction fees compared to credit cards and its use in cross-border transactions have not been enough to offset its ups and downs.

Until a unique application emerges that separates it from credit cards, online payments or other currencies, the expansion may remain slow, many market insiders said.

There has to be some motivation that would help this whole bitcoin system explode, like really good applications for consumers, said Jonathan Levin, a London-based digital currency consultant and co-founder of the Oxford Virtual Currency Group. At the moment, there isnt.

Last weeks second auction of bitcoins by the US marshals service, which showed a drastic drop in bidders from the first sale in June, demonstrated just how far bitcoin has fallen off the radar. The first auction attracted 45 unique bidders, with 63 bids, while the December sale showed just 11 buyers and 27 bids.

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Bitcoin stalls after hitting record prices in 2013