[valhalla]

If the Microsoft was liquidating bit coin the way planetjones describes, it was probably too inconvenient since the exchange rate (Bitcoin to $) would fluctuate so unpredictably and wildy (at times) there was no way to reliably exchange bitcoins for the exact amount customers were charged.

If the exchange rate was too low, MSFT would lose money. If it was too high, they'd be breaking a number of very basic but important laws that are designed to protect consumers.

[LukeHoersten]

Microsoft did liquidate to USD right away using a company called BitPay. BitPay would take on the short term price risk and Microsoft would get exactly what they quoted in USD. Microsoft was not subject to BTCUSD price fluctuation in this scheme.

[bunderbunder]

That said, just by eyeballing some graphs at Coinbase it looks to me like the exchange rate was a more volatile back when Microsoft started accepting Bitcoin than it is now. Which isn't to say that they couldn't reasonably decide that it's too volatile, but it does seem odd that they'd do so while the volatility's dropping rather than increasing.

I'm inclined to guess that all the BTC in the news just led them to a more fundamental reconsideration of their bet that it is (or will become) a viable unit of exchange. There are a lot of take-aways you could get from recent events that might lead to that decision, but the most fundamental one is simply that it's become clear that a huge portion of the people controlling Bitcoin's future don't want it to become one.

[valhalla]

November 29th 2013 (A week after the Xbox One release) 1 Bitcoin == $1216.73.

By December the same year the price "[had] crashed to $600, rebounded to $1,000, crashed again to the $500 range. Stabilized to the ~$650–$800 range."

Here's a graph showing the rate from July '13 to June '15:

https://en.wikipedia.org/wiki/History_of_Bitcoin#/media/File....