Bitcoin Drama

BitInstant CEO Calls Bitcoin a ‘Really Risky Investment’

Obviously.
(Photo: Flickr/Zach Copley)

(Photo: Flickr/Zach Copley)

As evidenced in the past week, dealing with Bitcoins can be a traumatic experience. With so many record highs followed by equally steep drops that seemingly happen several times an hour, we wouldn’t be surprised if traders have broken out the Xanax by now.

Now, some fans of the hacker-created, crypto-currency are complaining that their problems are only being compounded by BitInstant, an online exchange service that transfers cash into Bitcoins.

Dozens of dissatisfied users are writing on the New York-based company’s Facebook page to voice their annoyance with its slow transfers and poor customer service, with some even jumping in with accusations that the whole endeavor is a scam. New York Magazine talked to CEO Charlie Shrem, who insisted his company is totally legit and that it’s usually the user’s fault for the slow payments.

“Our support is on an eight-to-twelve-hour delay. But a lot of these guys are entering incorrect account numbers. Then, when the payment doesn’t go through, they e-mail us saying, ‘Where’s my money?’” he said.

Mr. Shrem, who confessed that he’s working on three to fours of sleep, said the company is handling upwards of three thousands transactions each day–up from the several hundred it used to see. He also forecasts a “correction soon” in Bitcoins’ constantly wavering value, but insisted caution if you’re thinking about investing:

“I wouldn’t say not to buy, but it’s a really risky investment. Don’t put in money you can’t afford to lose.”

Unless you’re willing to risk it all to become a so-called Bitcoin millionaire, it’s probably better to invest in something, uh, real.

Follow Jordan Valinsky on Twitter or via RSS. jvalinsky@observer.com