The world's two fastest-growing economies came down hard on Bitcoin in recent weeks.
Dips followed, but ultimately the virtual currency began to slough off the news and continued to gravitate toward a loose, but tightening, trading range.
And as a former senior advisor to a Silicon Valley venture capital firm, I've seen a lot of opportunities to make a killing on technology over the years.
I'm talking about everything from ultra-fast semiconductors, to advanced sensors, to the rise of the Internet and today's mobile revolution.
But in all those years, I've never seen anything reach critical mass as quickly as Bitcoin.
Consider that less than three years ago, few but a small cadre of hardcore tech geeks had even heard of this new crypto currency.
Today, however, this virtual money is traded on roughly 80 global exchanges. It's also accepted at thousands of retailers throughout the U.S.
And it has handed some savvy investors gains of 1,000% or more in as little as a few months' time.
Yet, skepticism persists. Predictions of Bitcoin's imminent demise by a wide range of so-called "experts" have proved premature at best.
Fact is, Bitcoin to date has met every challenge thrown at it and come back stronger.
For Bitcoin's backers and investors, that's great news. Because Bitcoin is now defying a growing list of global governments doing their best to stop its advance...
Central Bankers Are Worried
You can see why central bankers and finance ministers from around the world are so worried. After all, Bitcoin presents a major challenge to their fiat currencies.
Just look at what recently happened in India. Traders there had been investing in Bitcoin as a hedge against the declining value of the Indian rupee.
Over the Christmas holidays, the nation's central bank came out swinging. It warned citizens not to invest in Bitcoin. The authorities said users of virtual currencies faced "potential financial, operational, legal, customer protection, and security related risks."
But India's leaders didn't stop there. Finance ministry officials then forced several exchanges to close. The government also raided several offices, seizing information about the exchanges and detaining several people.
This was the second big government to target Bitcoin in less than a month - it followed a similar move by China in early December.
China's leaders want to stop the advance of the dollar, which accounts for the bulk of the $3.6 trillion they hold in foreign exchange. Chinese citizens were using Bitcoin as a back-door way to convert the Chinese Yuan into greenbacks.
So, China banned the nation's commercial banks from trading in Bitcoin in early December. They then prohibited third-party payment platforms like Alipay from doing business with Bitcoin exchanges.
After China's crackdown, the price of Bitcoin promptly fell by more than half from around $1,045 to a recent low of $445. Since then, the currency has remained volatile but has climbed back to trade in a range around $900 on Mt. Gox, one of its leading exchanges.
In other words, Bitcoin bested the world's two largest developing economies...
Governments Are Backed into a Corner
And it's not just big governments that want to block the world's most popular form of virtual money.
Thailand's Central Bank recently announced that Bitcoin is illegal, adding that any related transactions also would be considered illicit. But the central bankers appear to have acted too hastily - they lack the legal authority to ban Bitcoin.
That would take an act of parliament or a ruling from the Ministry of Finance, neither of which has yet moved against the digital payment system. That means Bitcoin's use in Thailand is frowned upon but still technically legal.
Meanwhile, Taiwan has banned the use of Bitcoin automated teller machines there. Robocoin, a small startup firm, had said it wanted to locate in Taiwan after recently installing an ATM in Vancouver, Canada.
The head of the country's Financial Supervisory Commission (FSC) went on to say that "if any Bitcoin ATM is illegally installed in Taiwan, the FSC will remove or demolish it."
Taiwan, however, has not banned Bitcoin and hasn't really put a dent in local trading.
For its part, however, Norway wants to play both sides of Bitcoin. Norway's top tax official recently said Bitcoin "doesn't fall under the usual definition of money."
But Norway isn't taking any chances. It's decreed Bitcoin a "financial asset."
And you know what that means. Norway threw in the towel and is going to tax Bitcoin profits...
Don't Believe the Negative Hype
With all these governments ganging up on Bitcoin, it was only inevitable the U.S. media would once again label Bitcoin a "bubble."
A headline from the Dec. 18 online edition of Wired said it all: "Bitcoin Bubble Bursts as China Cracks Down on Digital Currency."
You'd think Wired would have learned its lesson. In November 2011 it ran an article on the "Rise and Fall of Bitcoin" after the currency, then only two years old, underwent a sharp correction.
The obituary was incredibly off base. Bitcoin then traded at $2.50. At current prices around $900 it has gained an astonishing 35,900%!
That hasn't stopped mainstream economists and finance professors from assailing Bitcoin over the last several weeks as nothing more than "funny money." They've been quoted in everything from the Business Insider to the Wall Street Journal.
But a story that ran Jan. 5 on SFgate.com, home of the San Francisco Chronicle, is a classic. Under the headline "Bitcoin Is Hardly a Wise Investment," the publication said:
"So why in the world would anyone invest money that they will need later in life in Bitcoin? For the same reason that people continue to invest in Ponzi schemes, of course."
This is beyond misguided. It's just plain wrong. Bitcoin is a threat to global governments precisely because it's completely decentralized. There is no Charles Ponzi behind it.
Not even a Ben Bernanke or Janet Yellen, for that matter...
Now then, as much I as believe in Bitcoin for the long haul, I have to say that this is a risky, volatile investment. It's still in the very early stages, and we will continue to see corrections.
That's why I tell investors this is a very exciting opportunity that you don't want to miss, but you shouldn't bet the farm on Bitcoin...
To help you better understand the potential risks and returns of Bitcoin, Michael has prepared a short video tutorial. It's free and you can access it here.