I lost $50,000 in Bitcoin crash, but I'm still a believerApril 18, 2013: 6:43 AM ET
At the start of the year, Simon Lang was about $1,000 in the hole on his initial Bitcoin investment. But as the price of the digital currency ballooned to an all-time high of $266 last week, Lang found himself $60,000 richer.
But that didn't last very long.
As Bitcoin prices tumbled to around $50 earlier this week, the value of his stake shrank to about $11,000.
"I was surprised at how fast the price went up," said Lang, a 32-year old digital forensics manager in Staffordshire, England. "I was expecting it to fall a bit, but not as much as it has."
The price of the virtual currency, which was created by an anonymous hacker just four years ago, has increased almost 20-fold this year. It gained particular attention in the wake of a mini-bank run in Cyprus that raised concerns about the health of government-backed paper currencies like the euro and the U.S. dollar.
But as a rush of activity overwhelmed trading platforms, the price of the currency tumbled almost as fast as its rose.
Lang first began investing in Bitcoins two years ago, when they were worth around $20 apiece. Over the span of a month-and-a-half, he invested about $4,000.
"It started out just as a hobby," said Lang, a self-proclaimed technology geek. "I found the idea of a new and digital currency interesting. It went hand in hand with my work in digital forensics, so i decided it would be good to get into it."
Over time, Lang has become a Bitcoin believer.
"I don't see this as a short-term investment," said Lang, who expects Bitcoin prices to gradually recover in a couple months. Already his stake is worth about $20,000 again thanks to a small rebound.
"I've done research and think that Bitcoins will be a valued currency that we see accepted alongside paper currencies, kind of like credit cards over the long haul -- not as replacement," added Lang.
While he doesn't plan to buy any more Bitcoins, he isn't cashing out anytime soon.
Lang is also using his expertise in data recovery to develop a system at his company, Sytech Consultants, to help investors retrieve their Bitcoin wallets when they get 'lost.'
"People are able to save their Bitcoin wallets to their computers, mobile phones and any other digital format they please, as well as having them uploaded on the Internet or stored within an exchange," said Lang. "Unfortunately it is easy to delete data from electronic devices without realizing the consequences. Using digital forensic techniques, we can recover these 'lost' wallets along with its contents for a user."
Lang is also implementing a Bitcoin payment system for customers who want to use any of Sytech's data recovery services.