SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]
sec.gov
sec.gov
Wow.
From the ruling....
> First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.
> Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. I'm not sure I entirely understand if they mean that Bitcoin itself must be regulated or just that the SEC needs to see that the major exchanges are regulated.
If its the former, then I think this is game over, if its the later then............hmmm I really don't know.
EDIT Having gone through the ruling it looks like they have a few reservations.
1) Most of the bitcoin trading happens on unregulated markets
2) Most of the volume happends in China and not the us and is therefore hard to regulate.
3) The ETF is tied to the Winklevoss own Gemini exchange which has little volume and often inferior pricing to other more liquid exchanges.
4) They bring up the lack of a liquid futures market, though I'm not sure this is really a concern.
> The Commission has, in past approvals of commodity-trust ETPs, emphasized the importance of surveillance-sharing agreements between the national securities exchange listing and trading the ETP, and significant markets relating to the underlying asset. 144 Such agreements, which are a necessary tool to enable the ETP-listing exchange to detect and deter manipulative conduct, enable the exchange to meet its obligation under Section 6(b)(5) of the Exchange Act to have rules that are designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest
So until bitcoin markets are regulated by the SEC or similar no ETP/ETF products I suppose.
I'm a bit disappointed that there is no ETF but this is pretty darn reasonable.
bitcoin is a text file.
Gold persists.
(sorry, spend too much time on zerohedge...)
Bitcoin has practical applications as well, on the Internet as peer to peer cash. But like gold, it's value comes largely from speculators, not its practical applications.
Power changes with men with gens are empowered to enforce it.
Basically most smiths run an official registry. Even though a gold bullion is yours, most countries will forbid you from melting it into something else and destroying serial number in process, just like even if you own your house you cannot set it on fire. There are penalties including jail time. Its irrelevant if you put same serial number back on remelted PM.
Do you have some links for this? I did not know that and I'm not sure why would you get jail time for that.
I mean, what is the rationale? Is it about somehow preventing transfer from a legal market to an unregulated one?
I get that you can't mint your own gold coins or bars, but why not melt them? I'm very intrigued by this.
It is much easier and faster to sell 10 x 100g tabs than 1 x 1kg.
Its obvious whatever that such rules can hardly be enforced.
Sidestory: Argentina had an issue with inflation making coins worth less than their metal, and the bus lines (which were coin operated) turned out to be hoarding coins for reselling.
So that's not likely not gonna happen ever. The ruling kills any other bitcoin/virtual asset ETF from getting approved as well.
So we're going to have competition in exchanges, a free market of them with various rules/surveillance levels? Neat!
[1] https://en.m.wikipedia.org/wiki/Alternative_trading_system
This is partly why SEC wants underlying to be regulated.
Furthermore, selling naked options (Level 3 access) without hedging or verticals requires certain capital and margin requirements, I do not think it is easily possible to get 50x levered in options alone - you'd probably need /ES futures for that.
On a later spin than the one he bet on. Which, you know, happens in roulette all the time.
Seriously, who in their right mind takes out an option with such a short life?
The SEC has a three pronged mission:
- Protect investors - Maintain fair, orderly, and efficiently markets - Facilitate capital formation
With this decision they missed on all three. No investor was protected. The BTC market today was not fair, orderly, or efficient. There was excessive capital destruction.
Registration means you're complying with certain laws. Those laws, in turn, make diligence easier for investors. If you remove those baseline expectations, marginal transaction costs go up.
That is a loss of 25% of its value. This announcement does nothing to hurt the utility of Bitcoin or its application as a medium of exchange. That drop certainly seems like a speculative investment bubble popping.
> Nothing about the currency actually changed.
You can say this about about everything: "while nothing about the pound changed, brexit caused the price to go down."
That's because Bitcoin isn't directly tied to any economy. But just as Brexit had a real world impact on the pound, the SEC decision had a real world impact on bitcoin: It is directly tied to how people perceive Bitcoin, which is an import aspect just as well.
- being a good anonymous currency
- being a truly global currency for irreversible online transactions
- being a currency that's easily programmable
That's the three main use cases for Bitcoin. There are contenders for #1 (Monero, Dash), and for #3 (Ethereum). For #2 it's still the easiest because of the huge network effect behind it.
Traditional currencies can't compete with crypto for neither of the space. They are attached to systems that prevent transactions from being anonymous, global, irreversible or programmable.
Its design allows it to be pseudo-anonymous at best, while Monero, for instance, has anonymity built in. Therefore if one seeks a truly anonymous currency they cannot possibly find it in Bitcoin.
As many issues as Bitcoin has today, it has clear use cases.
How? Bitcoin atms were basically non-existent there and from what I read on /r/bitcoin at the time from Greeks no one there was accepting it in stores.
>There were capital controls restricting more than 100 euro worth of withdrawals from banks per day.
Yes and bitcoin didn't help this since the ways to get cash for your bitcoin involved international transfers which exposed you to those restrictions.
>Sure it's not helping you if you are buying a coffee but if it's saving parts of your pension that you worked your whole life to earn then it becomes very important.
I'm not sure what this has to do with the question above. Could you expand on it some more?
Other than that it's a much safer bet in Venezuela to buy USD than bitcoin though and that is generally what happens.
If you're poor in a country with a government like the Venezuelan one betting your limited funds on a speculative investment that requires an active internet connection to use doesn't seem wise or helpful.
How?
He said physical US currency was at a huge premium in the country because there wasn't nearly enough of it to go around, and the official exchange rate was clown shoes.
Yes, there were in fact $4/gallon, $5/gallon, and even $8/gallon gasoline and diesel prices posted, many by noon. This also increased the price of everything shipped by truck for a while, too.
Prices came off that peak quickly, but took months to years to revert completely.
[1] - https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=E...
The price of a christmas tree drops precipitously the ~9PM on christmas eve every year, that says nothing about the value of a dollar.
Not saying that's what did or didn't happen on 9/11, though.
If I charge $1000 to eat a cracker from my cupboard, the value of a dollar didn't suddenly decrease by 99.99%.
I find that Bitcoins are an effective hedge against conventional wisdom.
a good overview of the origins of the crisis. how politicians for their own shortsighted gains made one poor decision after another and led the country into financial crisis.
There are many who would argue it is a good store of value since it can't be manipulated by the issuing state's monetary policy or susceptible to the poor fiscal management of the issuing state.
Several of the major volatility events in the past of bitcoin were related to Chinese government announcements or rumors regarding regulation/legality.
Sure one can transfer bitcoin without governmental approval (or against restriction), but that annoying need to convert to and from fiat in order to trade for other goods and services means that the governments still have a great deal of influence over bitcoin.
Sure but I was speaking to the OPs assertion that this particular event is proof that it is not suitable as a store of value.
>"Several of the major volatility events in the past of bitcoin were related to Chinese government announcements or rumors regarding regulation/legality."
Right but this is to be expected given that China recently has been the largest market for Bitcoin by volume no? [1]
>" but that annoying need to convert to and from fiat in order to trade for other goods and services means that the governments still have a great deal of influence over bitcoin"
Is that any more annoying or any more inconvenient than having your hard-earned savings devalued by your government?
[1]http://www.coindesk.com/estimating-data-china-real-bitcoin-t...
I wouldn't recommend holding fiat currency as savings, except for perhaps 2-3 months of salary equivalent in case of emergencies. The rest should be stored in other assets based on your risk profile.
But it is currently a fact of life that we must exchange our cryptocurrency for fiat if we want to buy goods and services most places. While the number of merchants accepting bitcoin is growing, it's still quite small compared to the number of merchants who take local currency.
Fiat money has its plusses, though. Directly related to the fact that governments _can_ manipulate them is the possibility of reputational currencies. Here, a state has managed its fluctuations and taken actions when prompted for sufficiently often that "news" affects them much less than commodities, since the markets assume the state will act well before it becomes an issue (this also damps good news, since to a certain effect the good news was "expected").
A good study in this phenomenon, and how to break it, is what's happened to Britain since the referendum. It has lost a lot of value, obviously, but also its volatility has gone sky-high.
Going back to OP's point, a well-managed fiat currency can be a better store of value than any commodity. Entertainingly, Sterling has lost a similar amount of value to BitCoin, but it took much longer and is regarded as a disaster. Although, like BitCoin, you'll be able to find fans swearing the exact opposite.
http://www.ibtimes.co.uk/european-court-justice-ruling-bitco...
https://cointelegraph.com/news/pay-up-in-bitcoins-norway-pro...
Loans absolutely will evaporate if hyperinflation occurs. Lets say you give a $1000 loan that pays out $2000 after two years and the value of the dollar drops 50% over the first year. You will still get $2000 in 1 year. Assuming the value of the dollar holds, you won't have made an actual profit. But what if the value of the dollar continues to drop? If you think its going to drop another 50%, you'd be better off selling your loan for $1000 now, in which case you've already lost half your value, assuming you can find a buyer.
I suspect you could probably put all the people in the world that got rich from buying at $1 and holding in a school classroom together for a chat and not be very crowded.
Those kind of statistical anomalies happen all the time, you must be aware of them if you look at real time chart. The bottom line is that you can't really know what the price is before a 30min period ends.
That being say, I expect the price to go down further after a bounce (disclaimer : I'm not a financial adviser, this is an opinion). Bitcoin was already at its all time high, and then there was the rumor of ETF, promising it will go even higher and will reach the moon. That's a big red flag to me. What seems the most plausible to me is that it will now enter a downtrend until it finds its support, then only start a new uptrend. I may be wrong, but at least I won't loose money.
I totally agree we can't use btc as a currency, though. I have a prepaid visa card that I can load with btc, but I only use it very rarely because it's annoying to have to look at chart to know when is the good time to load my card for this week's grocery. Things are settled, now, bitcoin is a speculative asset. It would be more interesting if cryptocurrencies like tether, which provide USDTether and EURTether, crypto currencies always indexed against their fiat counterpart, were finally available at scale.
Thus, "anything can happen" if a few key players agree behind closed doors and change the rules.
I think bitcoin is a quite useful transfer platform, but I think it would be foolish to store much of one's assets in BTC.
Update as of 11 March 01:44 UTC (4h43m after the SEC decision): BTC fully recovered!
It now stands at $1140, which is the level it was trading at just 2 days ago. From 09 March 00:00 UTC to the SEC decision on 10 March 21:01 UTC it gained +12% due purely to speculation ($1140 to $1280) and basically retraced these 12%: http://bitcoincharts.com/charts/bitstampUSD#rg10zig30-minzcz... I am impressed. I thought downward trading pressure would have lasted for days/weeks after the SEC rejection.
That's what the 1MB blocksize limit is for.
And do it in all the major jurisdictions?
> and block ability to run smart contracts or any other software on it.
How do you think smart contacts play a role?
No, you'd just need for the regulated exchanges to control a substantial share of the total volume of trade, which could happen by shift in trader preferences, unregulated exchanges becoming regulated, or, yes, unregulated exchanges shutting down.
1. A governing body that can create rules and regulation for the market.
2. An enforcement body that can enact penalties for rule violations.
The problem I think is not so much the governing agency, it's the enforcement for rule violators. It's one thing to punish Mt. Gox for violating the exchange terms, but what if it's some shady anonymous bitcoin exchange broker in China?
Unfortunately for them, the SEC, quite reasonably, requires more than one regulated market to exist for the underlying commodity, and probably preferably not owned by the company behind the ETF itself. Seems obvious in retrospect.
From the ruling, it doesn't really seem that was an issue. That Gemini does very little of the US and an utterly miniscule amount ogmthr global bitcoin trade made the surveillance agreement with Gemini insufficient, but a single-but-dominant regulated exchange would probably be sufficient.
Then some proper options would be nice. Preferrably someone who doesn't trade against their own customers, which at least one exchange is open about. There's a lot that could be done in the Bitcoin ecosysten (well, at least we are rid of MtGox).
It means commodity exchanges dealing in Bitcoin regulated by the CFTC or similar entities in other jurisdictions. There are some already, but they do a very small share of Bitcoin volume.
> Coinbase has KYC, banking relationships and tax integration, I'm sure that can be extended to an exchange.
That's money transmitter stuff, which is a different set of regulatory requirements.
I'd challenge ANY government to regulate cold, hard, cash
It could be coincidental, but I've always been suspicious that the Winklevoss twins were the first people of a mind and with the capital to start gaming the BTC market as one can any other financial institution.
The Winklevii are not people I'd like to distantly do business with.
Edit: I'm trying to find articles but it was years ago. What I recall were cycles of Ramps and Bear Raids. https://en.wikipedia.org/wiki/Market_manipulation
Sell coins, create negative news & watch the price go down, buy coins at the new low.
Same as what unscrupulous people have been doing since the beginning of commerce.
I only made a few bucks, but I was curious if it were possible then to move such a tiny market. It was.
Cryptocoin markets are a haven for scams and manipulations. When I was into it I was hearing of a new scam almost every week. I don't think there is any correlation with Winklevoss let alone causation. Unless you have some evidence or references to present?
Citation? Not disagreeing - I have no knowledge either way, but this is about as useless a statement as one can imagine without backup.
This was etherium, which is also very interesting; etherium and BTC have been highly correlated over the last few months. I suspect that the crazy dip is just bots trading on that fact and the immediate correction is humans.
Interesting part was, it went from 1250 way up to 1350 hours before the announcement making people feel someone bought on insider information but turned out that was some FOMO buyer.
I was trading right then sticking to the monitor for 8 hours straight waiting for their announcement.
You can trade the OTC product with ticker GBTC [1]. It is a sponsored note - has quite a bit of volume on OTC markets. AUM is about 230mm. Expense ratio is around 2% (atrocious).
I noted that - before bitcoins drop on Friday afternoon - GBTC was up about 135% over 2 years - versus bitcoins 200% appreciation. So the tracking error is quite bad.
The volume this week is actually down. It is only a handful of people trying to intentionally spike the price, and trade off the news to turn a daily profit. The only suckers are other day traders, and hodlers actually suckered some of them by buying in the dip they created.
weekly volume: https://data.bitcoinity.org/markets/volume/30d?c=e&r=week&t=...
If a handful of people trying to spike the price and trade off the news can cause BTC-USD to be 30% more than what it "should" be (i.e., what the price would be in a high-information, high-liquidity, low-shenanigans market), then the SEC is absolutely correct to say that the ETF is too wild to be approvable at present.
For comparison, on June 24 (Brexit), GBP-USD fell from about $1.50 to about $1.35, a 10% drop, and that was (IMO) much more significant news about the long-term future of the pound.
> The Winklevoss ETF proposal was rejected because the SEC found that the significant markets for Bitcoin tend to be unregulated overseas markets that are potentially subject to price manipulation. But this creates a chicken and egg problem. How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?
If the key driver for domestic demand for the commodity is readable derivatives such that one needs to create such in order to drive demand, then, well, too bad.
If there is sufficient inherent utility in the underlying commodity, you won't need to violate normal exchange criteria to create derivative markets to stimulate demand for the commodity, the commodity will drive itself, and create the conditions where it won't be unduly onerous to create derivatives markets that meet the normal criteria.
As bitcoin exists right now that's not the case of course. Bitcoin is now a mostly speculative asset since the amount of transactions you can do is extremely small compared to the market value of bitcoin at the moment.
1) A much better number to use is 4,500/10 minutes, because if the transactions aren't used in a prior second, they can still be used in the next.
2) One-way ratcheting timelocked channels (these payment channels work kind of like a giftcard) are ridiculously easy to implement -- basically just use this scriptPubKey: ``` OP_IF <Bob's public key> OP_CHECKSIGVERIFY OP_ELSE <now+8 days> OP_CHECKLOCKTIMEVERIFY OP_DROP OP_ENDIF <Alice's public key> OP_CHECKSIG ```(from https://21.co/learn/intro-to-micropayment-channels/) These only require two transactions total to send many transactions from Alice to Bob. Even as technologies like Lighting Network are further developed, which make these channels full duplex, institutions looking to get high volume trustless transactions through should have very little challenge adopting simpler channels now.
3) The number of transactions is completely separate from the amounts that can be transacted. Large value transactions move through bitcoin as easily as small, so even if the number of transactions were bottle-necked, this is still very useful for settling larger amounts with finality.
The ETF has been the talk of the town for the last four years, and it is not unreasonable to think that it has been holding the hand under the price, since to a lot of people it represented the coveted inflow of institutional investment into bitcoin.
With this gone, the immediate outlook for bitcoin is bleak. There is little market adoption to speak of, in fact bitcoin is probably losing market share, as the initial hype and attention grabbing announcements of bitcoin support have died down, and a lot of merchants have decided that the miniscule business it drives is not worth the trouble. Also, the network is straining even under the current load, leading to (much) longer transaction confirmation times and higher fees. The average fee for a bitcoin transaction is now almost one dollar - this rules out a lot of use cases that previously people would have said were ideal for bitcoin.
Which leads me to the even bigger problem: The bitcoin community and ecosystem is in a massive deadlock, between two sides that are equally rabid and antagonistic, and dividing the project down the middle, between the developers and the mining operators. Few outsiders likely know how bad it has become, but visit r/bitcoin and r/btc on reddit if you're curious. This would be concerning in itself for the future of the project, but it also means that right now no major updates can be made to the bitcoin network, because each camp runs a big percentage of the network and block any new initiative from the other side.
All of this makes me very bearish for bitcoin in the medium term. I am very sure that bitcoin has a future, but how long out that is, and how big it is, remains doubtful and could well be influenced negatively by particularly the issue of governance. Satoshi once said something like "in ten years bitcoin is either worth a huge amount or nothing". I'm starting to fear that might not be true - bitcoin could also become a small niche platform for a very limited set of use cases.
The transaction backlog is so high because people are using bitcoin more than ever, alot of times to get to those other cryptos
I would say coveted inflow of retail investment. I don't think any serious institution would invest in bitcoin. The risk is too high given that the AUM can go to 0 instantly with one data breach.
The biggest benefit I can think of is that some institutional investors have restrictions on the types of securities that they can buy.
Someone could solve this by creating a company to buy lots of bitcoin, and then having an IPO to list that company on a public market. Then pension funds would be allowed to buy it, Jane Doe could buy some in her IRA, etc.
Any reason this wouldn't be just as good as an ETF?
Those restrictions exist for a reason. Trading unregistered things over-the-counter, e.g. private stock or Bitcoin, carries unique risks. One of those is around fraud. Most investment funds aren't equipped to do fraud diligence (and benefit from not having to do it on ETPs).
You're repeating yourself. That is more or less what an ETF is.
The expected benefit is that the Winklevoss twins can now cash-out the $11m+ of Bitcoins [1] on the backs of public sucke-... I mean investors.
There's not really any other immediate purpose for this ETF other than that, they've been working to build trust (a currency's only source of value) in Bitcoin for years now in order to add value to their own holdings; they will likely continue to resubmit the proposal [2] until they figure out a way to weasel things through. An ETF would be the ultimate stamp of trust and approval -- having the US gov't essentially validate Bitcoin via SEC approval means that $11m could easily turn into half a billion or more.
[1] https://www.washingtonpost.com/news/the-switch/wp/2013/11/09...
[2] https://www.forbes.com/sites/laurashin/2017/03/10/sec-reject...
It was a way for the Winkelvii to do a big Bitcoin dump without crashing the price. That's all, really.
And instead of rare earth metals, lets say it's iron? Something that is mineable almost anywhere, kind of like bitcoin. So you would have exchanges with these agreements, but you would also have exchanges without the agreements.
That doesn't mean it's their biggest concern; regulatory entities (and courts) tend to focus on criteria that meet those qualifications over other because they produce decisions which don't require creation of substantial new rules/precedent, and are more difficult to challenge.
Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated."
Note that the CFTC, which regulates commodities futures trading, is (or was?) considering regulating digital currencies:
https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Comm...
However, it doesn't seem like they've come to a decision yet.
Miners need income, because mining is actively expensive. In the long term, this means they have to mine on the chain with the most valuable block reward. This means the economy really gets to decide the longest chain, not the miners.
But the ETF likely would have been large enough to tip the scales. Miners can stomach 48 hours of loss to push an agenda.
And it's probably not good to have such a huge portion of the economy in one place anyway. An ETF will make more sense when bitcoin has more maturity.
function generateBitcoinNewsReaction(oldPrice, newPrice) {
if (oldPrice > newPrice) {
return "This is good for bitcoin.";
} else if (oldPrice < newPrice) {
return "This is good for bitcoin.";
} else {
return "The price is stabilizing; this is good for bitcoin.";
}
} function generateBitcoinSkepticism(oldPrice, newPrice) {
if (oldPrice > newPrice) {
return "It was a bubble all along.";
} else if (oldPrice < newPrice) {
return "Deflationary currencies can't work";
} else {
return "The market cap is too low to support a stable currency";
}
} generateBitcoinNewsReaction();
generateBitcoinSkepticism();
generateButteryPopcorn();gravity is strong here
The usuall ETFs are baskets of bonds, stocks and commodities. Regardless of the level of volatility, they are all priced per the capacity of those stocks/bonds/commodities to create economical value. That means you have a solid economical logic to price them. Of course, supply and demand impacts the price, but even if no one wants to buy a certain stock, that stock has a marketable value. You can take the assets of that company, sell them and divine the cash by the number of stocks out there. Without going to too much details, I fail to understand how bitcoin can be treated like a stock/bond/commodities? Bitcoin value is purely based on the supply and demand forces. Without supply and demand, bitcoin has no value. On its own, it has no value generation power and therefore cannot be compared or traded like a stock, neither can be packaged into an ETF.
As much as I do not like to agree with SEC, this one is a right decesion!
> And second, those markets must be regulated.
So, essentially: bitcoin does not and can not satisfy these two conditions (nor can any other such scheme) and therefore you can't trade anything that is directly or indirectly representing bitcoins.
As a lay-person I've come to expect convoluted legalese as found in contract terms, but where those are typically designed to bamboozle and obfuscate, or at least keep corporate lawyers employed decoding and negotiating each others writing, judgements and rulings are designed with the opposite goal in mind. If you are potentially creating case-law, it better be clear what you have decided and why.
[1] http://law.justia.com/cases/federal/appellate-courts/ca9/13-...
Checked Coinbase right about 30 minutes after it cratered down to 995. Text price alerts don't seem to be working :/
US 401k / IRA accounts can, and do, buy stocks in a variety of markets, whether directly or through instruments such as NYSEARCA:VEU (also available as the mutual funds VFWAX and VFWIX.) I'm not aware of any special reason why foreign-traded ETFs would get special treatment that foreign-traded stocks don't?
>"The Commission, pursuant to Section 19(b)(2) of the Act,9 designates March 30, 2017 as the date by which the Commission should either approve or disapprove the proposed rule change."
https://news.bitcoin.com/sec-delays-decision-solidx-bitcoin-...
Bitcoin is a means of transferring wealth. It is a tool, not a commodity. When are people going to stop this speculation and treat it as such?
It's basically a wrapper class that lets people interact with things as if they were stocks.
I suppose gold does get used for something.
Gold is probably a better store of value than bitcoin. It's not a great one, mind you (the price is still too volatile). Its security can also be assured with physical protections that are easier for a layman to understand than bitcoin's electronic protections. Bitcoin has a small but nonzero chance of a total collapse in its value which gold will not face until widespread exploitation of asteroid-based mineral resources is commonplace.
Neither are effective units of account.
Positive interest rates would be bad by the same logic
Bitcoin investors are not like this; they are holding onto the money in hopes the value goes up. The bitcoins they are holding are not being used for any financial transactions. Those bitcoins are essentially out of the economy while they are being held. This is bad for an economy, when the currency is more valuable as an investment than as a vehicle for economic transactions.
What is happening is that supply is reduced. Demand has presumably remained the same as it otherwise would have been, and as a result the price rises. This is great for people holding, and it encourages more saving - but the rising tide is lifting for all boats here.
For you who is just temporarily utilising the network, the fact that the price of Bitcoin might be ludicrously high (in your opinion) doesn't change the fact that you can utilise the advantages of a decentralised liberated money for your wealth movement at the same cost that it would have been if Bitcoin were at a low price.
Ideally it should be both.
> This means that the only real reason to spend Bitcoin or otherwise use it as a payment is for situations where that's the only option and right now, and for the foreseeable future, that means assorted illegal or at best borderline illegal products
There are plenty of legal products you can buy.
> Perhaps a blockchain-based cryptocurrency might in the future resolve these issues, but otherwise it's a doomed product that I wouldn't put a single penny (or watt of household electricity) into.
The only real issue you're pointing out is the finite supply (volatility will sort itself out in time) which for example Monero answers with a "tail emission" meaning there is an ever increasing amount of coins.
Bitcoin's biggest use case is as an emergency fund. People in Venezuela who bought at $1200 in 2013 were still doing comparatively well when the price was $200.
If oppressive capital controls crack down in a nation like Turkey, Bitcoin can protect you.
Bitcoin is excellent for protecting yourself during financial emergencies. High volatility is acceptable in these situations. Some money is better than no money at all.
So then here's the controversy of your statement - if bitcoin is a deflationary appreciation-only thing - then maybe it's not as volatile as you claim and is fit to be used in EFT scenarios? Or if it is in fact volatile then maybe it's not all that deflationary in that it's value isn't bound to be going up indefinitely?
Which is it? :)
As a side note - yes, the mechanics of coin mining do make bitcoin "technically" deflationary, but just like any other "thing of value" this doesn't guarantee it's value in the "real world" to be mapped to that deflation 1-to-1. There's a finite supply of gold or oil out there for example - their prices however are bound to fluctuate quite a bit...
There's also the minor fact that a significant chunk of wallstreet already treats most of the bitcoin markets like commodity exchanges anyway. A significant driver of the massive instability in the bitcoin market is directly attributable to wallstreet treating bitcoin as a commodity. One possible upside of having an actual commodity exchange is that it might have helped stabilize some of that by decoupling the speculation from the actual bitcoin market a little, but I guess we'll never know at this point.
What a lovely shade of red, it really matches the charts!
Is there a more serious thing than Coinbase that exists?
ha ha ha, now china gets all the exchange data, morons
You can also use telnet to watch the price via:
telnet ticker.bitcointicker.co 10080If you want to have a lot more rich data that forms the data-points, and you can download :
We'll see how long the dead cat lasts.
See you at $600.
Like if the internet got broken up, Bitcoin would be even harder to use safely.
There are countries for which that may be true, but there are other countries with currency to hedge against those events.
https://bitcoinity.org/markets/bitstamp/USD
Same place it was three days ago. You could have made a lot of money if you had followed your instincts.
Or you could have lost it all.
There is an OTC fund that holds Bitcoin...but at a large premium to NAV
A choice quote from elsewhere on the Internet: "Write call spreads, collect $$$ when they expire... this worthless stock is a goldmine!"
I have no words.
All of the popular volatility ETFs/ETNs are traded according to SEC regulation.
> which have lost 99.999% of their value
Did you read the prospectus? Leverage isn't free. This is by design.
There's no way this is going to gain mass adoption by being this expensive.
More importantly, this signals strong government regulation in the bitcoin and cryptocoin industry in general. I wouldn't be surprised if we started seeing security laws being applied retroactively to all the scams like initial coin offering (like IPO but unregulated and heavily manipulated) on Bitcoin and Ethereum.
To the wary trend watcher, this is exactly what VC's feared and noted by the significant decline in VC investment in blockchain and cryptocurrency startups.
I struggle to understand what you mean. What sort of anchor are you using for how much the exchange rate should be for adoption? Cost of electricity, cost of mining equipment, cost of running a node? Satoshis are so abstract that "this expensive" seems irrelevant to everything except for historical rates.
Conventional wisdom on BTC is that one element that would improve adoption would be lower volatility and that in order to get that, the market cap would need to be much, much higher. Given the fixed inflation rate this usually suggests that the exchange rate has to be correspondingly higher.