Bitcoin value dives after China banks ban

Re:Bitcoin value dives after China banks ban by ok_craig on Thursday December 05, 2013 @02:36PM (#6856615)

I just bought a $1000 plane ticket a few days ago for bitcoin. Seems like that's fulfilling the role of a currency.

You should know that you don't actually have to hold bitcoin to accept it as a payment method. Services like Coinbase let you instantly exchange it to cash if you use their merchant tools, so the merchant is actually exposed to zero risk.

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Re:Bitcoin value dives after China banks ban by sentenza on Thursday December 05, 2013 @03:35PM (#6857035)

Ah, that explains it. It would be interesting to know what mechanisms Coinbase et al use to avoid balance sheet fallout by sudden downward fluctuations.

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Re:Bitcoin value dives after China banks ban by YourCupOTea on Thursday December 05, 2013 @04:12PM (#6857279)

They would have to employ some sort of currency risk hedge. http://en.wikipedia.org/wiki/Foreign_exchange_hedge

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Re:Bitcoin value dives after China banks ban by jonknee on Thursday December 05, 2013 @05:37PM (#6857895)

Easier said than done when you don't have an actual currency to hedge against and the complete lack of a functioning options market.

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