DEPENDING on the day of the week, Bitcoin is either on the brink of euphoric success, or complete and utter ruin. Either a big firm such as Zynga is adopting it (long live Bitcoin!), or a big country such as China is crushing it (rest in peace, Bitcoin).
For years, Bitcoin's proponents have wanted the currency to be taken seriously, and unfortunately for them, this is happening. Governments and central banks have turned their stony gaze on the heaving underworld of Bitcoin and begun or threatened to intervene. Now, what regulators do about this virtual oddity that refuses to die will decide its future.
In order to predict how anxious authorities are about Bitcoin on any given day, one just needs to consult the currency's price chart.
For example, in August last year when the Bitcoin hovered around a paltry US$100, Germany appeared mainly preoccupied with the potentially lost revenue. Then, it ruled that Bitcoin was "private money", and that any resulting profit would attract a capital gains tax.
But this week, with Bitcoin busting the US$1,000-mark again, what was considered "private money" started being treated like a public issue. On Tuesday, an official from Germany's central bank warned against the "highly speculative nature" of Bitcoins.
Across markets, officials trod a similar path of sombre concern last year. The European Banking Authority, India, Malaysia, France, Singapore and New Zealand have variously cautioned against Bitcoin's volatility or lack of a central authority.
The central authority-argument is precisely the reason Bitcoin is a superior alternative, some argue. "Unlike a voucher, or points issued by a single entity like an airline or food court, there is no single counterparty to fail," says David Moskowitz of Coin Republic, a Bitcoin exchange platform.
Be that as it may, in December, China tightened the screws on the Bitcoin industry in two steps - first banning financial institutions from carrying out Bitcoin transactions and later forbidding payment processors from working with Bitcoin exchanges by the end of January.
In the absence of a legal way to convert Bitcoin into and from yuan, the virtual currency will become Monopoly money within the mainland if workarounds on a large scale cannot be found. On the news, Bitcoin's price promptly plunged, falling 30 per cent to US$535. Even so, the currency displayed a frightful degree of resiliency, rebounding to US$800 even before Zynga sent the price soaring further last week by saying that it would accept Bitcoin as payment for in-game items.
"Overall, I think China's current restrictions have already been discounted into the price . . . Adoption of Bitcoin as a unit of exchange will continue despite China," says Coin Republic's Mr Moskowitz.
As governments stay wary, private firms and individuals have piled in. Gyft.com, a key online gift card service, now accepts Bitcoin for store credits from Whole Foods, Target and Victoria's Secret. On Thursday, Overstock.com sold its first item for Bitcoin - a patio set for US$2,700.
In Singapore, interest has also grown. Volumes on Bitcoin exchange FYB-SG crossed $850,000 in November - up from $100,000 in March 2013.
With the currency displaying staying power, Bitcoin proponents have rejoiced, but governments are bound to grow even more suspicious.
While some worries are country-specific - in China, Bitcoin had been a way to circumvent yuan currency controls - others are general headaches. For most countries, Bitcoin represents yet another money-laundering hole to plug, another means of anonymously trading contraband and one more way to hoodwink the taxman.
Just yesterday, a national risk assessment report involving the Monetary Authority of Singapore (MAS) said that the authority is closely watching the use of virtual currencies such as Bitcoin for illegal doings, and will "consider the need for regulation if necessary".
Even among the countries that have not banned it outright, those ambivalent towards Bitcoin far outnumber the ones that are not. So far, only the United States, Canada and Hong Kong have approached anything remotely resembling tacit approval.
In the US, the Department of Justice told the Senate that Bitcoins can be a "legal means of exchange" in November. A month before that, Canada allowed the installation of the world's first Bitcoin ATM, and Hong Kong will soon have the second.
As lucrative businesses spring up around Bitcoin, the craving for legitimacy has increased. This, many believe, can be achieved through regulation. If countries have rules for Bitcoin usage, then there is at least a game to be played and won, goes the reasoning.
Shortly before new Chinese rules decimated volumes on its largest Bitcoin exchange, BTC China, its CEO said that regulations would be "for the good of the consumer".
Even so, others are against the idea. "In my opinion, any government intervention is negative and they should stay out of it," says FYB-SG's founder, Luv Khemani.
Regulation has unpredictable outcomes. You could regulate something towards legitimacy, or you could regulate it to death. China's position on Bitcoin, for example, started out as regulation, but evolved - or mutated - into what is practically a ban.
When Hong Kong said this week that it would not regulate the use of Bitcoin, many cheered. "The best thing that any government can do is not to regulate anything, so ultimately, this is good news," says Tomas Forgac of BTCPOS, a Bitcoin point-of-sale system for merchants.
Too much celebration, though, could be premature. Sometimes, governments do nothing simply because they have not made up their minds.
The making-up of minds can be messy. Take Hong Kong's reason for allowing Bitcoin ATMs: "Bitcoin is not a currency."
And then take Taiwan's reason for rejecting the same ATM: "Bitcoin is not a currency."
Already, the same understanding of the issue has led to entirely different outcomes.
The difference in comprehension from country to country can be staggering. South Korea has dismissed Bitcoin as having no intrinsic value, but Germany sees the same thing as a unit of account that is solid enough to be taxed.
At the same time, the Bitcoin community continues to be at odds with its own.
In the US, the Bitcoin Foundation spent months last year charming Capitol Hill like a seasoned Washingtonian, meeting government officials to allay their fears.
But in the same year, the CEO of Overstock.com was quoted saying: "Money is too important to leave in the hands of government officials . . . the long-run value of all fiat currencies goes to zero."
This disjoint in approach highlights a deeper schism over what Bitcoin should eventually become - an unregulated protocol free of establishment trappings or a respectable component of the global economy that toes the line of fiat currencies.
Currently, Bitcoin has a foot in both realms of possibility. The French would say that its ass is between two chairs. (Actually, the French central bank says that Bitcoin represents a "financial risk". Its view on posteriors is not known.)
Now, Bitcoin businesses are forced to operate on the shifting sands of policy and perception - an unsustainable kind of limbo.
While Bitcoin refuses to die, it risks being neither dead nor alive - the ultimate undead of virtual currencies. But before it can be anything more than that, it will have to avoid being felled with a blow to the head by the blunt force of public policy.