Čvn 23

Highschool Dropout and Bitcoin Millionaire Hosts Reddit AMA

· June 23, 2017 · 2:00 pm

High school dropout and Bitcoin millionaire, Erik Finman, has hosted a Reddit AMA to shed some light on himself and his journey in the cryptosphere.


Too Cool for School

Erik Finman was recently featured in a CNBC story in which he described the journey through the Bitcoin and cryptocurrency world which lead him to acquire over $1.09 million in Bitcoin and other smaller holdings in altcoins like Litecoin and Ethereum. Finman took the opportunity to conduct a Reddit AMA, where users were allowed to ask questions about Eric’s story.

Dropping out of high school at the age of 15 to focus on his educational website, Erik Finman made a bet with his parents in which he agreed to go to college if he wasn’t a millionaire by the age of 18. Thanks to the continuous Bitcoin rally, Finman was able to hire professional programmers to work on his website, later selling it for Bitcoin again, starting his own VR company, all while trading Bitcoin and increasing his holdings.

lots of bitcoins

Now, Erik Finman holds 403 bitcoins which are currently valued at $1,092,678.08, among other holdings, which means that he doesn’t have to go to college, according to the bet. However, it’s also worth noting that Finman is not yet a millionaire, as his profits in Bitcoin have not yet been realized. However, Erik believes in the potential of Bitcoin and blockchain technology.

During the Reddit A.M.A, he stated:

I see bitcoin going up way more than just the 2000s/3000s where it’s been. Bitcoin and blockchain technology is where the internet was in the 80s, not the 90s, but the 80s. And if you just get a fraction of the world on it. And I know all these entrepreneurs inventing world changing technologies that one of them will do a lot to get new people onto Bitcoin thus raising the price. Bitcoin will be worth tens of thousands of dollars to hundreds of thousands of dollars to even millions of dollars a coin

Reddit AMA

Riding the spotlight created by CNBC’s story, Erik Finman decided to host a Reddit AMA (Ask Me Anything) in which he planned to answer user questions, most likely on his journey towards becoming a millionaire and his dealing with Bitcoin and other cryptocurrencies. However, the focus was not on Bitcoin

Reddit AMA

Mainly curious about Erik’s taxes and education, many users wondered if Erik Finman paid his taxes accordingly, with some users suggesting the contrary. Many also asked if Finman has plans to return to formal education, although he didn’t show much interest in doing so.

The thread was also flooded with negative comments attempting to discredit Erik Finman as a kid who made a “lucky bet” when purchasing Bitcoin. Finman addressed one of these comments: 

I spent every day working to build up the number of Bitcoins I had. Turning 80-100 Bitcoins to 403 + other money in cryptocurrencies. Feel free to take what I say with a grain of salt but it was not one purchase, it was years of trading in addition to building out my projects. I wanted to clear that up. I’m not perfect, so you are right there might be imperfections in my advice.

Erik Finman

Erik Finman – Lucky or Shrewd?

While it may be simple to dismiss Erik Finman as “simply lucky”, it would be unfair to do so. When considering that Bitcoin is still so far from mainstream adoption, having the foresight to research and invest in Bitcoin is far from lucky, unless you’re buying Bitcoin blindly because someone told you too.

Although it is true that Bitcoin’s volatility may be near impossible to predict, Finman’s understanding of the underlying technology allowed him to make an investment, not based specifically on the market (or hype) but based on the potential of Bitcoin. Not only that, but his understanding of the markets themselves allowed him to grow his Bitcoin holdings with trades.

However, Finman has also proved that there is more than just luck to him through various projects he has previously worked on, which have also granted him high yields. These projects include his educational websiteabd his own VR company.

What’s your take on the story of Erik Finman? Will Bitcoin continue to make young millionaires? If so, can this change in wealth distribution change the world for the better? Let us know your views on the comments below?


Images courtesy of Twitter, Shutterstock

Show comments

Share
Čvn 22

Bitcoin Potentially the Most Lucrative Trading Investment Since Amazon

· June 22, 2017 · 1:00 pm

Comparing the dotcom booms, Amazon share price and performance to Bitcoin draws some very interesting parallels, setting Bitcoin as potentially the world’s most lucrative trading investment.


Emerging Tech market Capitalisation Then and Now

Gordon Scott at Investopedia writes that Bitcoin is comparable to how Amazon was treated during the Dotcom boom.

Even by the start of 1997, everyone knew Amazon had a great idea, but no one could fully explain how much its shares should be worth.

It is that very problem that Bitcoin now faces. Everyone realizes that it is a great idea, yet it is hard to fully grasp exactly how much it should be worth. Bitcoin’s primary use as a monetary is well known, but the actual technology and its potential applications are still a great mystery to many.

Amazon faced the same problem as it took new approaches to distribution and supply chain management. Interestingly, Amazon initially started in the book sector and, while it dominates that market to this day, it has since evolved by several orders of magnitude to be the giant that it is today. Gordon further explains:

Investors were not able to fully and accurately quantify Amazon share value at first. Can you blame them if it was hard to analyze the idea of using supply-chain management software to create a virtual book warehouse and factory outlet mall synthesized into a single website?

If we take a look at Amazon’s market valuation back in its 1997-99 cycle there existed the same degree of price volatility that Bitcoin has experienced, at least in it’s 2016-17 period which has seen a much steadier rise as a result of actual widespread investor speculation.

It is the cryptocurrency’s volatility that makes it such a potentially highly rewarding trading investment. The price swings, while hopefully not terminal (as they became after 2010), offer the trader many opportunities to take profit and reinvest. As long as Bitcoin continues to follow the price trends set by Amazon, its traders can potentially continue to make a very lucrative trading investment with the coin.

As can be seen in the charts above, the dotcom boom parallels the current state of cryptocurrency. Furthermore, as other altcoins emerge to stand up to rival and compete with Bitcoin, there exist the same issues of fluctuations in price.

These same issues were present in 1997, except that some companies went on to continue rising as others crashed with the bursting of the dotcom bubble.

Bitcoin In Perspective

Sue Chang at Marketwatch posted this chart (below) which puts the current size and value of Bitcoin into perspective:

Bitcoin - Putting the World's Money into Perspective

As illustrated above, Amazon currently stands at a value of $402 billion, with Bitcoin already sitting at a $41 billion market capitalization. Given this, it’s not hard to get a sense of the size of the cryptocurrency’s current projected value and there is a great deal of market confidence in the coin to have reached this stage.

While many see Bitcoin as being in a bubble, and there may yet be many more volatile dips to come, it is worth remembering that companies such as Amazon suffered also from this market volatility. Volatility, while not desirable in a currency, could just be a sign of Bitcoin and its technology truly finding its feet among its fellow market giants.

Will Bitcoin fulfill its promise as the most lucrative trading investment? Let us know in the comments.


Images courtesy of Investopedia, MarketWatch

Show comments

Share
Čvn 16

Bitcoin Through The Eyes of the World’s Most Respected Billionaires

· June 16, 2017 · 12:00 pm

In a recent article, The Motley Fool examines what billionaires Mark Cuban, Warren Buffett and Richard Branson have to say about Bitcoin.


The Motley Fool’s Matthew Frankel writes that it can be a smart idea to listen to what some of the most successful people in the world have to say, and with that, he explores what three of the world’s most respected billionaires have to say about Bitcoin.

While these are merely opinions, each brings with it a unique perspective and outlook on what is very much an emerging technology and a potentially disruptive threat to their empires.

Mark Cuban on Bitcoin: The Cautious Take

Dallas Mavericks owner and investor Mark Cuban made news in the cryptocurrency world recently when he made the following tweet:

Within hours of his tweet the price of Bitcoin fell, he then tweeted:

While this does highlight the volatility of the Bitcoin, it also brings attention to just how sustainable the coins current high price is. However, Cuban does have a great enthusiasm for the underlying technology of the blockchain.

Warren Buffett on Bitcoin: The Dismissive Take

Warren Buffett

In a 2014 CNBC interview, American business magnate and investing giant Warren Buffett dismissed bitcoin claiming that it was a technology essentially devoid of value. During the interview, Buffett offered this advice to readers:

Stay away from it. It’s a mirage, basically…The idea that it has some huge intrinsic value is a joke in my view.

Many dismissed his comments, however, since Buffett has avoided investing in new technology throughout his career, admitting that he does not understand them well enough to invest. A cautionary lesson in research there. However, Buffett’s comments did not sit well in the tech industry where he received condemnation for his criticisms. Tech venture capitalist Marc Andreessen echoed the sentiments of many in the tech industry:

The historical track record of old white men crapping on new technology they don’t understand is at, I think, 100%.

Buffett’s comments in regard to Bitcoin and blockchain technology were made 3 years ago and it is entirely possible, if improbable, that his attitude has changed since.

Richard Branson on Bitcoin: The Positive Take

Sir Richard Branson

Not only does UK tech billionaire Sir Richard Branson speak highly of Bitcoin and blockchain technology, he also suggests applications for the technology in a socially beneficial way. Using the technology to create a better, more secure and forgery-proof land titling system is just one of the real-world applications Branson envisions. This would ideal for developing countries and places where corruption is rife, as land titles are regularly disputed.

Branson also holds annual Blockchain Summit events on his own private island where blockchain experts and developers, as well as the top minds across a wide range of industries, brainstorm new ideas and applications for the technology. Ultimately, his attitude towards bitcoin is that it is working, and working successfully. He does recognize, however, that there is room for even better solutions than Bitcoin currently provides.

Have these Billionaires got the right idea about Bitcoin? Should they be doing more like Richard Branson in promoting it and looking for active uses? Let us know in the comments below?


Images courtesy of Flickr, AdobeStock

Show comments

Share
Čvn 14

Apple Co-Founder Steve Wozniak Invested in Bitcoin “Just for Fun”

· June 14, 2017 · 1:00 pm

Apple co-founder Steve Wozniak personally bought into Bitcoin at $700 to see what could be done with it. With the price now hovering around $3000 he says he’s way up on his investment.


Personal Exploratory Investment

Steve Wozniak, who left Apple in 1985 but remains very much invested in technology, revealed he bought BTC during an interview with CNBC on Monday:

Steve Wozniak invests in bitcoin

I remember getting interested in bitcoin some time ago. It was $70 for a bitcoin, man and I went online and you had to have a special bank account at a special bank and I couldn’t buy any bitcoin so I gave up. Eventually, I got some of them at the $700 stage and it went down to $350. I didn’t invest, I did it so I could play with bitcoin.

He went on to say that he was interested in the experience of using the coin in a real world environment such as what it was like to shop with it at places such as restaurants and hotels.

“It’s not that easy to do yet, but it’s getting there. I was just playing around trying out how to buy and sell stuff and I didn’t care I lost a ton of money, but now I’m way up,” Wozniak added.

In 2014 he tweeted this video of the tested.com team’s experiences with a Bitcoin ATM.

Bitcoin, A Secure Technology

When he was asked what he thought to blockchain technology and why he thinks it is important, he said that he likes the technology, admiring how every single transaction is noted and saved. He went on to speculate:

(Bitcoin has) A lot of good security and traceability and looking-back aspects to it … That’s probably why a lot of banks are interested in it.

Wozniak, an advocate of cyber security, spoke at the Business Rock Technology Summit in Manchester, England where he criticized US authorities over their legal pleas for access to Apple customers data:

There are politicians who do not have a clue as to what cyber security is all about trying to pass laws saying that Apple has to make a product less secure. Why? That’s a crime. That is just so horrible. I just cry! Why would Apple do it for such a weak case where the government were not going to get any valuable information at all – it’s impossible.

Bitcoinist previously spoke about Wozniak as an active Bitcoin business side investor in 2015.

Will we see more news from Wozniak regarding Bitcoin in the future? Let us know in the comments below.


Images courtesy of LinkedIn, AdobeStock

Show comments

Share
Čvn 07

MIT Grads Envision a Future Where Anyone Can Start a Bitcoin Fund

· June 7, 2017 · 1:00 pm

A new machine-based investing platform called Catalyst aims to allow cryptocurrency investors to become bitcoin fund managers.


Disruptive Trends in Finance

Enigma is a start-up run by MIT graduates and their current project is an online financial platform called Catalyst. According to the platform’s whitepaper, “Algorithmic trading and machine learning are proving to be disruptive trends in investment management.”

Bitcoin and cryptocurrency have a large barrier of entry for those looking to invest the smart way. Many current, non-traditional investors got in as early Bitcoin adopters. These cryptocurrency enthusiasts have a wealth of knowledge and experience that gives them a familiarity with the market as well. Algorithmic trading and machine learning are yet another facet of what drives the current cryptocurrency ecosystem but are currently only utilized by a select few in this field rather than in a structured fund managed way.

The technical knowledge required for successful high-frequency trading in volatile markets is a hurdle when it comes to investment and trading. There is also very little existing data and information consolidation to trade on, never mind utilize, to drive advanced techniques using algorithmic and machine learning in gaining a trading advantage.

Automated for the People

Data-driven automated processes generally excel over human operators in terms of speed and, given the right datasets, potentially results. Site API access means that investors are able to execute trades in a much more streamlined way, which is particularly advantageous when an exchange may be suffering from high traffic loads. Such occurrences are common on existing cryptocurrency trading platforms, especially when interest approaches fever pitch causing site outages created by demand surges.

Automated trading is not new, it is used on traditional exchanges outside of cryptocurrency where it is already proving to be a disruptive technology. As the Catalyst whitepaper says, it is a disruptive trend for what has traditionally been a human-driven system.

For those wanting to make low maintenance investments that leverage the power of automated bots it is an attractive option. The average user’s reality, however, can be quite different. Most trading bots, if successful, are likely to be based on proprietary technology and unavailable for purchase.

There are open-source versions available online but they are quite simplistic, require a modicum of programming skills and most definitely a degree of algorithmic fine tuning to get the best results from them. Mistakes in the programming can also be costly. A seemingly low maintenance solution soon starts to look less attractive, unless of course, someone is already managing that fund for you to invest in.

Building a Better Financial Ecosystem

Enigma co-founder and CEO Guy Zyskind explains the current interest in Bitcoin and cryptocurrency in general:

A lot of people are starting to look into it, and invest in it, but it’s still very much kind of like the Wild West.

Zyskind is interested in creating an online ecosystem where users can not only become cryptocurrency traders but can also find and potentially become fund managers. Fund managers will be ranked in terms of their performances on leaderboards, enabling others to follow their lead. Catalyst comes in as a platform for people to leverage the kind of data that drives automated trades. This data, in turn, could be used by a fund manager to drive a successful Bitcoin fund for others to invest in.

Blockchain Banking App Humaniq Reschedules ICO, Offers Solidarity to Chinese Investors

Fast Company’s Steven Melendez writes:

In Catalyst, Enigma plans to make various datasets available for use in automated trading decisions, from historic price information to analyses of the overall sentiment of news stories and social media posts about cryptocurrencies. The company plans to also invite users to create their own datasets and make them available—perhaps for a fee—to those setting up funds and looking for mathematical indicators of how and when to trade.

The Catalyst Whitepaper contains the following more direct information of the datasets:

Catalyst bitcoin fund investing platform

“Since the ecosystem surrounding crypto-markets is still in its early days, relevant data sources are scarce and fragmented,” write the Enigma founders in the white paper. “We plan to change the landscape, bringing it to the level of more mature financial markets.”

This kind of development hints that Bitcoin may not need to secure the Winklevoss ETF with regulatory bodies and that it could again potentially enable itself outside traditional finance regulation.

Winklevoss

Are we seeing more an increase in this entrepreneurial development of fund management in the cryptocurrency field? Will this be the next entry point for a more mainstream investor approach? Let us know in the comments below.


Images courtesy of MIT, Shutterstock 

Show comments

Share
Čvn 01

UK’s Most Popular Investment Platform to Offer Bitcoin

· June 1, 2017 · 8:30 am

UK’s most popular investment platform, Hargreaves Lansdown, will soon allow its clients to invest in Bitcoin.


Hargreaves Lansdown

Hargreaves Lansdown, the administer £70bn of investor money with 876,000 clients, has announced it will allow customers access to invest in Bitcoin.

“By adding self-service, online dealing, the team at Hargreaves Lansdown is providing UK investors with professional and quick access to bitcoin in the UK and greater Europe,”  Ryan Radloff, XBT’s head of investor relations told the Telegraph.

This follows the recent news that the American financial services corporation, Fidelity Investments, will soon allow their clients the ability to view their cryptocurrency holdings on the Coinbase website.

However, Hargreaves Lansdown, are using a fund offered by a Swedish company, XBT Provider, which is structured as an ETN or exchange-traded note. These funds are listed on the stock exchange meaning Bitcoin can be bought and sold as a share.

“The value of and any amount payable under the certificates will be strongly affected by the performance of Bitcoin and the US dollar/krona exchange rate,” XBT Provider explains. “As such an investment in the certificates is likely to be highly volatile and thus risky.”

In other words, British Bitcoin investors will be exposed to two areas of risk, not just the famous volatility of the cryptocurrency itself, but also to the US dollar/Swedish Krona exchange rate.

Clients Asked to Invest in Bitcoin

Danny Cox, head of communications at Lansdown noted that the decision to add Bitcoin as an investment option was driven in part by customer demand.

Cox:

We have seen a handful of clients asking for the ETN, so it’s not purely driven by a provider wanting to be listed.

This interest, although written off as a handful, demonstrates that the demand must surely have been significant among traditional investors for the company to include it.

Despite the potential risks, Bitcoin has (again) been outperforming every asset and fiat currency in 2017, and smart money is starting to pay attention. This is a major step for Bitcoin towards mainstream adoption and becoming a legitimate asset for traditional finance.

Is Bitcoin finally breaking into mainstream finance? Will other brokers follow suite? Let us know in the comments below!


Images courtesy of Twitter, Shutterstock, moneytothemasses.com

Show comments

Share
Kvě 26

Bitcoin’s $500 Price Drop Sets Community Abuzz

· May 26, 2017 · 12:00 pm

Bitcoin prices dropped yesterday from $2800 down to $2460, sparking concern and speculation across the cryptocurrency community.


The large drop in value has come alongside the largest Bitcoin Bull run in the currencies history, it caused panicked posts on social media with one Reddit user posting;

“What the hell happened with the drop from 2800 to 2460?!!!!!” – TakinBackMyLove, a distressed Reddit user.

Many other new Bitcoin users, drawn to cryptocurrency investment by the current upward cycle of the market, also voiced their concerns while Bitcoin veterans remained calm, having seen this all before, and much worse.

Welcome to Bitcoin

The drop follows three straight days of price increases for Bitcoin as the price climbed from $2000 to $2800, which is was an all-time high for coin. In financial markets, it is not uncommon to see corrections like this after relatively large gains over a short period of time, which really does bring a touch of sanity to a frenzied market. That the decrease was not more substantial, given what has overall been a very large rise, should give investors comfort.

Bitcoin Historical Prices

Past Volatility

Bitcoin has been historically famous for its massive volatility, with its price declining by several orders of magnitude in just the space of minutes. In August 2011 the price dropped by almost 50% from $13.50 down to just $7 in the period of 7 hours. However, the coin is also famous for its sudden gains too, as Bitcoin prices began hitting $80 dollars in the same year.

Bitcoin price drop August 2013

Another example is the 2013 crash, often attributed to the downfall of the infamous Japanese based exchange, Mt. Gox, when the site went down it took many Investors coins with it. Bitcoin took its time recovering, and cryptocurrency as a whole entered a bear market. Bitcoin has made slow and steady gains since then, however, it is only since March that the gains have started to rise at a disproportionately increased rate.

It comes as no surprise that in the wake of such massive gains that Bitcoin fever seems to have struck again.

Still Bullish

With daily candles ultimately still in the Green, all signs still point to the coin remaining Bullish and, at the current time of this writing, it has since started climbing back towards $2,550.

Bitcoin Still Bullish

What do you think of Bitcoin’s volatile history? Do you think prices will continue to climb or is it a bubble that is about to pop? Let us know in the comments below!


Images courtesy of BitcoinCharts, AdobeStock

Show comments

Share
Bře 24

Why The Bitcoin Miners Are Destined To Lose The Forking Wars

· March 24, 2017 · 6:00 pm

2,706 views

Excuse me for indulging myself, but there are many points of view towards what may be an impending hard fork for Bitcoin. This may come across as a loosely coherent ramble, but at least it is short and sweet. There is enough here to put it on wax, so here’s what I see, in the big picture.


This is in response to the Medium post created by Peter Rizun yesterday, outlining how this hard fork may play out, and essentially showing a way BTU wins, in the long run. (Roger Ver tweeted his support for this post, so I read it and posted most of these thoughts in the comments section, and here we are.)

In my humble opinion, the problem I see coming is if BCU breaks off, it will become an altcoin, as has been established by the Bitcoin exchange establishment. These miners can mine all the blocks they want, if the greater community doesn’t trust their developers, doesn’t want an altcoin, and isn’t buying BCU, it is irrelevant by design.

The market will decide who wins, and anybody who is not a miner wants to stick with Core and their chain. The miners are one thing, the market is something else. The miners might win a battle, but they would lose that war. They should keep that in mind.

Without those miners, BTC would definitely take a hit, but the Core developers could then quickly move to a 2MB upgrade and get SegWit and The Lightning Network approved, creating greater Bitcoin functionality, from a trusted group of developers, and an incredible upside in off-chain scalability that an on-chain approach would be hard pressed to match. All without the centralization and control of the miners.

segwit-logo

Users will follow anyone who is going to implement SegWit. The market is sold on this concept as a boon to Bitcoin functionality. BTU has not done a very good sales job at all regarding their position. Scaling away from miners will hurt mining, but it will let Bitcoin reach its full potential.

BTU needs to sell their mined Bitcoins to a market. I’m not seeing much of a market for BTU, outside of the miners and BTU investors, themselves. The miners do not control Bitcoin, and even Core does not control Bitcoin. Maybe, just maybe, The People control Bitcoin’s future growth? Anyone who thinks the market doesn’t have a handle on who each side is looking out for here is fooling themselves.

Just seeing how the community is responding, keeping my ear to the ground, the greater community will not follow the miners, who are primarily looking to turn a digital buck in Bitcoin. They will follow Core, who is looking after the greater good. Miners will lose that tug of war.

Bitcoin miners vs Bitcoin core

It has become clear that BTU developers cannot replace BTC developers, as the recent bugs have shown the world, but BTC miners can be replaced. There are plenty of people around the world who want that job and can do it just as well.

This power struggle is really temporary in nature. People will not follow miners looking for profit first, and who want to hijack the entire system, from now on, in order to get it. That is not leadership.

At the end of the day, The People will decide to back Core. The only question is when will the dissenting miners, clouded by visions of endless Bitcoin profiteering, figure this fact out?

If the miners didn’t get the memo, that the vast majority of the market will stick with Core and not dump BTC for any BTU altcoin, use this. Like Bitcoin itself, it’s far from perfect, but it’ll do just fine.

How do you think a hard fork would play out? Should there be an increase in block size? Let us know what you think below!


Images courtesy of Bitcoin Core, AdobeStock

Show comments

Share
Bře 14

Any Bitcoin ETF Gaining Approval in 2017? Don’t Bet On It. Here’s Why

· March 14, 2017 · 4:00 am

The defeat of the COIN Bitcoin ETF turned out to be the story that wasn’t. Yes, it caused a sharp dip in the market, but this was filled within hours on Friday evening. Some say this is not a big deal because other ETF proposals wait in the wings. But the evidence says they will suffer a similar fate.


‘Significant Markets for Bitcoin are Unregulated’

Let’s take you back to Friday afternoon. The decision on the Bitcoin ETF was set to come down by Saturday, March 11th, so the SEC held up their end of the bargain. They did not delay the decision again, but said they will not approve the proposal. The deeper issue is why it was not approved.

4

“Based on the record before it, the (SEC) Commission believes that the significant markets for bitcoin are unregulated,” the SEC said in a statement. “The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.”

Bitcoin ETF a ‘Cause for a Pause’

This does not sound like a problem based on The Winklevoss Twins actual proposal, or a technicality. The problem the SEC seems to have is with the Bitcoin market overall. They specifically mentioned multiple global markets, plus a long time view of their progression towards regulation, which really isn’t in the offing.

bak

“The SEC made a strong statement and it listed its concerns, and I thought it did a very good job of explaining its rationale,” Phil Bak, the former head of ETF listings at the New York Stock Exchange told MarketWatch.

Bitcoin will mature as an investment over the coming years, but I don’t think we’ll see a change in how the SEC views it over that time. For the other firms trying to bring one to market, I’m trying to think of a nice way to say, ‘no chance in hell’ for their approval.

The Winklevoss Twins have been on this mission for almost four years and they have decided not to give up on the process. However, the reasons for denial have virtually nothing to do with the proposal, so where do they go from here?

Winklevoss Twins

“They can obviously try again, and SEC membership continually changes, but getting rejected is usually a stop, or at least cause for a pause. I don’t know what the next steps would be,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA.

“The SEC highlighted the unregulated market for bitcoin, and I don’t think the filers could do anything to change that,” Rosenbluth said.

Therefore, it appears that similar filings such as Barry Silbert’s Bitcoin Investment Trust will share a similar fate as COIN or at least until regulators get better oversight of Bitcoin and its related markets.


Images courtesy of Shutterstock, LinkedIn

Show comments

Share
Bře 11

6 Reasons Why The ETF Defeat is a Major Win For Bitcoin

· March 11, 2017 · 1:00 pm

2,697 views

Many within the Bitcoin community are pretty upset about the Winklevoss ETF being turned away by the SEC. If you are among them, buck up, little camper! I’m going to reveal several reasons why Bitcoin is better off without the passage of the COIN ETF.

[This is an op-ed article. Viewer discretion is advised.]


Bitcoin Must Be Regulated…to Be Regulated

First things first, let’s review yesterday’s ruling by the Securities Exchange Commission. Here is the text from their 38-page statement:

As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. 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.

The way this is phrased, with their approval based “surveillance,” it doesn’t sound a Bitcoin ETF is going to be approved, by the Winklevoss Twins or anyone else, anytime soon. This leads to my first issue with the ETF and the first reason this defeat is a win for Bitcoin.

An ETF will require copious amounts of banking and/or government “surveillance,” according to the SEC statement. Is that what you, a lifer within the Bitcoin community, want? 

Twins

Bitcoin transactions are already more transparent and open-source than any global economic system on the planet. They are so public that many developers are writing scripts and apps to make the system more private. Many mainstream investors and institutions avoid using Bitcoin because of its lack of privacy. Others use altcoins like Dash and Monero instead, but this tentacle of government wants, even more, oversight and “surveillance?”

Now, I’m sure the Winklevoss Twins are decent gentlemen, but who wants them having so much control over Bitcoin?

They own the Gemini exchange in New York and it is estimated that they have over 100,000 BTC themselves. Now they get full access to a Wall Street fund full of Bitcoins as well? Is that level of Bitcoin hoarding and centralization serving them or the greater Bitcoin good? Do you, or I, need the rich getting richer? I don’t. 

OTHER ETF’s PROBABLY A NO-GO TOO

I spoke with Charles Hayter, CEO & Founder of Crypto Compare in the aftermath of this decision and shared his views on the situation. We agreed that Bitcoin was better off without the ETF, with him saying,

Whether other jurisdictions will allow a Bitcoin ETF remains to be seen – but for the time being all is not well – and it seems as if the other ETF’s in the pipeline for the SEC are facing the same stone wall.

Another reason is why throw out the baby with the bathwater? Why make Bitcoin change, for the worse, so that mainstream investors get a free ride into Bitcoin’s economic system?

Why can’t they earn it like I and many of you have? Why can’t they go to an exchange and buy BTC, and move it into a hardware wallet? Why does Bitcoin’s greatness have to be compromised for the bourgeoisie? Where I come from, those who are late do not fruit cup!

DID I LOSE ANY REAL VALUE?

Next, let’s look at Bitcoin price, one of the main reasons for the despair of so many, as their precious digital investment will not “go to the moon” as quickly now. Look at the price this morning. What did you really lose?

Many were rightfully predicting that the price would nosedive to around $1,000 USD, but it is trading at almost $1,200, not much different than it was just 24 hours ago, before “the decision.”

Here is the chart over the last 24 hours, provided by Bitcoin Average:

3

Do you know what I did? I bought in on Ethereum last month, before the Enterprise Ethereum Alliance caused a huge bump in value. I thought it might double the value, but it ended up adding 50% in a couple of weeks. Very happy with my gains, I cleaned out my ETH for BTC when it dipped to $1080. That’s what good investors do. They buy undervalued assets low and go long with them. I’ve already made 10% on my money because a good investor makes money when they buy, not when they sell. Go and do likewise, gents. The chart above says that many of you have, as well.

So the ETF fail just kicked out all the speculators, all the bandwagon babies, all the Johnny-come-lately’s, and what have you lost? Fifteen bucks? Big deal! In effect, the Bitcoin community has gone down to the river, beaten out digital currency with a rock, cleaned out all the dirt, and you have a legitimate Bitcoin market price, sans the inflation from day-trading pump-and-dumpers.

So what if it lost $230 in ten minutes? You know damn well you can’t kill Bitcoin, baby! It’s like “The Walking Dead!”

The free market in Bitcoin, which definitely does not exist in Gold, Silver, or FOREX, has shown you the actual market value of Bitcoin. That’s pretty damn sweet, and it’s a lot higher than much released. Bitcoin took the mainstream’s best shot and is still kicking like Bruce Lee, or Bruce Leroy (Barry Gordy’s “The Last Dragon”, circa 1985, highly recommended)!

WHO SAYS BITCOIN CAN HANDLE THE MIGRATION?

The rally in Bitcoin prices over the past several months has shown in a significant increase in the number of transactions. This increase is testing the limits of the network and resulting in much slower than normal transaction times.

For crying out loud, it takes 45 minutes for me to get an on-chain transaction done! Many people have complained to me on Twitter, and on Reddit, that their transactions aren’t going through in 3 hours, 6 hours, 12 hours? What would an ETF flood of mainstreamers do to those lead times? Is Bitcoin’s infrastructure ready for that influx? Not seeing that.

Bitcoinist_Bitcoin Donations

Like a Muslim migration flood into Sweden, I’ve seen this movie before, and it doesn’t end well. Bitcoin could become a “no-go zone” very quickly. Bitcoin is not ready for such mainstream movement into the system.

If Wall Street hit Bitcoin right now, man, you’d be sorry. I would personally recommend that Bitcoin is not ready for any such thing until this block size/SegWit/Lightning Network upgrade is full resolved and ceded in the protocol, and that’s not happening anytime soon.

YOUR INVESTMENT NOT REQUIRED FOR SUCCESS

Finally, Bitcoin has been the world’s best-performing currency over three of the last four years, without any ETF or even the incentive to gain one.

Last year, Bitcoin rose 126.2% in value without Wall Street’s help. I view the ETF as just some nitrous oxide being added to a McLaren P1. Bitcoin is going to be worth a minimum of $1,500 USD by year’s end, with or without an ETF, and 2k is still on the table.

In my opinion, Wall Street needs a Bitcoin ETF far more than Bitcoin needs Wall Street.

Wall Street

So, in closing, you’ve found a true market value, you’ve gotten rid of the financial jock sniffers, the government and banks left you because they can’t hardwire in more surveillance, and you only lost $15 in the cleansing?

Like The Rock in the 2004 flick, Bitcoin is walking tall this morning. The SEC has actually done Bitcoin a favor and cleaned up this town. Bitcoin has a lot more pressing issues to worry about. Let us begin addressing them and forget about shine from Wall Street. If that’s what you are after, you are surely missing the point of Bitcoin’s ethos.

It’s not about Wall Street. It’s about us. Grow Bitcoin by word-of-mouth, the world’s most effective marketing campaign. On the side of the Bitcoin box, it should clearly state “Wall Street not included.”

What do you think? Has the SEC done the Bitcoin community a favor or did it just take a major hit? Tell us your thoughts in the comments below.


Images courtesy of Shutterstock, Bitcoinaverage

Show comments

Share