I was a co-founder of TAV (we built and sold 3 TH/s of ASIC miners in Sept 2013). This journalist, Matt O'Brien, clearly has done little research on Bitcoin and is not familiar with mining operations. His article contains lies, fallacies, and personal opinions that do not reflect reality.

"What are [venture capitalists] supposed to say, though, when they've bet hundreds of millions of dollars on it?"

Fallacy number one. If VCs were merely praising Bitcoin with no (or very few) investments, the journalist would say "well why don't they put their money where their mouths are?". Now they do put their money on it, but he says "well what else are they supposed to say?".

"It's fallen 36 percent the past two days, as you can see below, with a 24 percent decline the past 24 hours."

This is hardly newsworthy. What he seems to forget or point out is that Bitcoin is and has always been volatile --no one denies it. There has been dozens of instances where BTC lost (or gained) 20% or more in a span of 24 hours. Today's drop is no different than the other ones.

"It's too bad Bitcoin doesn't have a central bank to help stabilize its value."

This is very ironic to write 2 days after the Swiss central bank themselves caused an appreciation of the CHF of 30% in mere hours, hurting Swiss exports badly.

"It has no inherent value"

Another journalist who fails to realize no fiat currency has any inherent value either. Currencies (whether fiat or crypto) have value because people demand/accept them (whether it is the IRS asking to pay your taxes in dollars or Newegg accepting Bitcoin). This is it. Nothing gives them "inherent" value.

"almost nobody uses it to buy anything other than drugs"

Utterly false. The journalist has no data, no source, nothing to back up this claim. This claim used to be made 4 years ago when Bitcoin was barely starting to get in the public eye, when the top exchange (MtGox) barely had a few thousand users, when there was no payment processors to help businesses accept Bitcoin, etc. But the reality is that the Bitcoin economy has grown very quickly over the last 4 years: today 82,000 merchants accept Bitcoin [1], numerous processors exist (Bitpay, Coinbase, etc), merchants like Newegg and Gyft experienced their best Bitcoin Black Friday sales ever [2], etc.

"Bitcoin prices are so low, you see, that miners are spending more money running their supercomputers than they're making from new coins."

This is not true at all. There is zero reason for a miner to, say, spend $50,000 on electricity a month to mine X bitcoins when he could simply buy these bitcoins from the market for, say, $25,000. So if this was the case, it would make sense financially and logically for the miner to stop mining and buy the coins from the market. At the very least they would suspend mining activities. In fact this is precisely what happened to CEX.io [3] (they were likely inefficient and overspent in some areas, compared to other miners who continue operating because they are still profitable).

Nowadays any large smart professional miner does not have high fixed recurring monthly costs like colocation in a data center (these are very cost-ineffective facilities to run mining operations). Instead they set up shop somewhere, eg. in a warehouse retrofitted for cooling and power, see [4]. This makes electricity their highest recurring cost, so they can in theory stop mining any time and it would significantly reduce their operating cost on the spot.

[1] http://www.coindesk.com/state-bitcoin-2015-ecosystem-grows-d...

[2] http://blog.bitpay.com/2014/12/09/bitcoin-black-friday-2014-...

[3] http://www.coindesk.com/cex-io-halts-cloud-mining-service-du...

[4] This is KncMiner's facility: http://www.datacenterdynamics.com/sites/default/files/KnCMin...