Over the last three days I have heard "bubble" so many times I swear I think MtGox must have the best damage control PR team in the world. This was a panic plain and simple. It was caused by MtGox and their inability (giving them the benefit of the doubt by assuming it's not more nefarious than simple incompetence) to address constant trade lag on their API. Nor have they done as they should and at least added stop-loss orders to protect their users. So when the lemmings saw a major sale and a massive change in the market depth they assumed this must be that bubble everyone is talking about.

A bubble suggests that this was caused simply by speculative trading gone wild. To the contrary I don't think that the price of $260 comes close to matching the true value of a bitcoin as a tool for international transfer of wealth or as a store of wealth. Unfortunately though the Pundits who have to sensationalize everything to get a sound-byte or a headline keep shouting PONZI, PYRAMID, or LOOK OUT FOR THE BUBBLE. Sad fact is that people in this world refuse to research and make their own decisions based in logic, so long as they have "educated" men to tell them what to think.

This wasn't a correction, at least not in the classic sense. Were people questioning if the trend was driven by media hype and speculation? Certainly. Did the market settle in at approximately where it would have been without the "bubble"? Sure. But saying that makes this event either a correction or a bubble is making the facts fit your conclusion. The lack of faith in the trading price's validity was a key factor in the panic, and what price it equalized at is a matter of cooler heads taking advantage and doing some shrewd buying.

What we need is to educate people away from using trading engines that are not designed for speculative trading in that manner. The exchanges we have are for actually trading fiat for bitcoin or vice versa one way at a time. At least until someone who has a clue how to design and manage a FOREX site gets one up and running the speculative trading is just silly and will end up costing the community a great number of people who will become jaded and blame it on bitcoin instead of their own ignorance.