Though Under a Cloud of Doubts, Bitcoin Marches Past 100,000 Mark in Daily Transactions

While governments and established payments networks around the world reckon with Bitcoin, the upstart digital currency has itself had to reckon this year with volatility that has seen its price plunge about 50% since its $700-plus January high.

But in other respects, Bitcoin is riding high. One of the latest reasons for optimism is that its daily transaction count cracked the 100,000 mark twice this week. On both Tuesday and Thursday, the count fell just short of 101,000, according to Blockchain.info, a Bitcoin wallet provider and keeper of statistics on the cryptocurrency. Only twice before, on Nov. 13 this year and on Nov. 28, 2013, did Bitcoin reach six figures in transactions. On the latter occasion, it set its record so far, at 102,010.

To put this performance in perspective, it took three-and-a-half years from the time Bitcoin was launched in January 2009 for it to reach the 20,000 daily-transaction mark. It then took it about six months to begin breaching 40,000 regularly. Activity has bounced around in a wide band since early 2013, though since the middle of this year it has shown a steady climb from the 60,000 level.

By contrast, Bitcoin’s price has plummeted to $375 after starting the year near $750. Theories for the price collapse range from concerns about regulation to a strong U.S. dollar to cashing in by early buyers. The eyes of the Bitcoin universe are particularly riveted on the state of New York, where the Department of Financial Services has proposed a so-called BitLicense to regulate exchanges and other companies that handle Bitcoin. At the same time, a MasterCard Inc. executive made headlines this week by expressing concern about the anonymity that cloaks Bitcoin’s users.

And, while more merchants are now accepting the digital currency—including major players like Dell, Dish Network, Expedia, Newegg, and Overstock.com—critics point out that in most cases these retailers are immediately converting their Bitcoin into dollars, fearing the alternative currency’s volatility.

Observers also point out that the stronger transaction count alone does not necessarily point to greater adoption. The numbers don’t indicate, for instance, how many of the transactions indicate actual commercial dealings between consumers and merchants.

But the fact remains that activity, at any rate, has been steadily growing, albeit in fits and starts, since the middle of the year, to the point that it has breached the 100,000 milestone twice so far in one week. Now the question is whether that activity can be sustained as the new year approaches.