Bitcoin Hype More Virtual Than Real

NEW YORK (TheStreet) -- In 2011, when Bitcoins freely traded for a dollar each, a $1000 investment held until today would make you a millionaire right now. Crazy I know, and if you were early and timed it right, you could have even bought Bitcoins valued around $1000 right now, for under a dollar each. Bitcoins give an entirely new definition to the term "fast buck." It's no small wonder why it's making news almost daily.

As a result, Bitcoin fever is quickly spreading to all corners of the globe, all but one anyway. Earlier today, China's central bank announced Bitcoin limitations within the Asian economic powerhouse sending the up and coming electronic virtual currency crashing over 25% to under $900 per coin before recovering above $1000 at the time of writing.

Chinese speculators who wish to buy and sell the electronic currency may continue to do so, but local banks won't exchange Bitcoins for Yuan. Without banks on board, gaining traction as currency accepted by stores and merchants will be a challenge. Smaller shops with an owner and a desire to accumulate Bitcoins may sell products for coins, but acceptance probably will not make sense for larger corporate vendors.

In other words, it appears the second largest economy is all but off-limits to Bitcoin. No one should be surprised by China's action. The People's Central Bank wants to become the next reserve currency, and anything that stands in the way isn't about to win favor.

It's not the first time the virtual gold nuggets have encountered speed bumps as speculators have created a ride appearing more like a space shuttle take-off and landing than a roller coaster. Even so, for many of the original believers who bought early and held the rewards are nothing short of pennies raining from heaven. Almost daily we can read about another newly minted Bitcoin Millionaire.

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