The 12 worst investments of 2014, #1: bitcoin

Performance in 2014: -52%

See all 12 of 2014’s worst investments here

What happened?

Bitcoin was the single worst performing investment of 2014. From a January high of $914-$1,012 (depending on the exchange used), it fell consistently over the year: its value stands at around $315 at the time of writing.

Why did it tank? The continuing government clampdown on sites selling illicit services (where anonymous bitcoins are often used as payment) didn’t help, said Extreme Tech.com. But, in reality, illicit trades made up a small proportion of Bitcoin transactions.

The bitcoin ‘crisis’ was a crisis of confidence. Over 850,000 bitcoins, worth a total of $450m, were stolen from Mt Gox, the largest bitcoin exchange site, and an enormous amount of bitcoin’s value wiped. The collapse shook faith in the currency’s security, its real selling point.

Who are the losers?

Internet entrepreneurs the Winklevoss twins, said by The Guardian to own around 1% of the entire bitcoin market.

Who are the winners?

Nasdaq.com’s Martin Tillier advised purchasing bitcoin as recently as the beginning of this month, arguing that this year’s crash was merely a correction. Others think bitcoin’s value lies not in the possession of the currency, but in the technology it exploits, which may pave the way for cheaper and more secure ways to transfer funds.

What have we learned?

Unregulated, anonymous currency is volatile. Who’d have guessed?

See all 12 of 2014’s worst investments here

  • Best Investment of 2015? Bitcoin

  • Rear Admiral Sir Vincent Smyth

    Bitcoin was heavily promoted by Dom Frisby. It is a meagre flash in a small pan. More laughable was the CNN expert who predicted cash would be extinct within 5 years. I ask you?