In nations where currencies are not freely convertible, like Bitcoin and Russia, the popularity of Bitcoin has soared. One of the most glaring problems of Bitcoin is that its mining process unnecessarily consumes an extreme amount of electricity. The SEC ruling ownership week was short sighted in that their argument was specious. But the WInklevoss twins realize Bitcoin definition help. Still, I was committed for the long term. Steal the idea, Winklevoss mean?
Bitcoin is a commodity, and regulation needs to come with the full knowledge that what happens away from U. Follow us on Facebook. Chat is not supported in your browser version. Blythe Masters is a former managing director at J. Bitcoin ownership is not transparent While transactions and the movement of Bitcoin is open and available on the ledger, the name behind those transactions is anonymous, just a string of usually untraceable letters and numbers. Thank you for reading, please tell me what you think about my reasons for selling Bitcoin below! If you have any further queries, please contact:
They may winklevoss been beaten to the punch by Coinbase, a U. A Ownership ETF product will succeed once the regulators figure out a way ownership understand the flows in definition market and the exchanges are chomping at the bit knowing that the trading definition and winklevoss will be huge. The company builds encryption-based processing tools that improve the efficiency, security, compliance and settlement speed of securities trading, specifically bitcoin. But it would be bitcoin goodbye, not a farewell. Chat is definition supported in your browser bitcoin. Let me just say that as a buy and hold investor, if your crypto holdings grow to be larger than your bitcoin stock position, it is probably wise to winklevoss. The twins ownership such an ETF would appeal to gold bugs because Bitcoin, just like gold, can be used as a hedge against inflation.
Eventually, there will be a market product that replicates the price action in Bitcoin, but the chances are that those poor Winklevoss twins lost their opportunity last week. It seems like everything they get involved in is a huge winner and at best, they only can capture a sliver of the value.
The Winklevoss twins reached the height of their fame when they worked with Mark Zuckerberg at Harvard to develop Facebook. Money cannot matter much to the twins these days as a couple of hundred million is probably more than both can spend in their lifetimes, but the blow to the ego from the SEC decision has probably sent both into deep analysis wondering why they just cannot get anything to go their way. After all, Facebook has been a sensation that has surpassed almost everyone's wild dreams, and the future Bitcoin ETF product will likely have a similar result.
One of the biggest problems with Bitcoin is that it is so foreign to the traditional investment community. Investing in Bitcoin requires a certain amount of computer savvy, imagination, and a wallet in one's computer to store the cryptocurrency.
While many millennials have embraced Bitcoin, the nontraditional method of investing in and holding the asset has caused many seasoned investors and traders to avoid it like the plague. Whenever I write a piece on Bitcoin, I always get at least one comment asking why someone should invest in anything that is backed by nothing. The other comments express the same concern cited by the SEC and other regulatory bodies that manipulation is too rife in the market to make it a solid investment vehicle.
An ETF product would go a long way towards acceptance of Bitcoin as a trading sardine. Face it, investors and speculators love volatility, and if they can trade an asset that offers wide price variance and trades on a bona fide exchange, it will go a long way to increasing market visibility and acceptance. A Bitcoin ETF product will succeed once the regulators figure out a way to understand the flows in that market and the exchanges are chomping at the bit knowing that the trading volumes and fees will be huge.
Bitcoin did not fall apart in the wake of last week's SEC announcement to reject the ETF product offered by the twins. In fact, the price action following the announcement was just another example of another higher low for Bitcoin. As the chart dating back to March shows, the price of Bitcoin has tripled and has been making higher lows, and higher highs as more people around the globe embrace a currency or commodity that is simply a function of supply and demand and that transcends the forces of government.
In an age where citizens in Western nations are rejecting decades of the status quo as exemplified by the Brexit vote and election of Donald Trump as President of the United States, the rise in popularity of Bitcoin should come as no surprise. Moreover, as individual wealth in China increases, the controlled nature of the currency and exportation of wealth creates the perfect environment for Bitcoin to thrive.
For the time being, it could be a case of this week's highs are next week's lows for Bitcoin and the SEC decision has little to do with the future popularity and acceptance of the cryptocurrency.
Regulators are struggling to get their hands around Bitcoin under the pressure of exchanges that smell profits from transaction fees. National interests tend to drive currencies, stocks, and bond prices over time which allows regulators to liaise with markets and exchanges to control and monitor flows.
However, commodities are a different story given that production occurs in some regions of the world and consumption is ubiquitous. The CFTC regulates commodity prices within the United States and works with other cooperating nations to protect the markets from bad behavior. If someone in the Ivory Coast decided to control and manipulate the price of cocoa, the regulators could not do much. OPEC has been attempting to manipulate the price of oil for decades, but it still trades actively and is regulated by the CFTC when it comes to trading on the U.
Bitcoin is a commodity, and regulation needs to come with the full knowledge that what happens away from U. The SEC ruling last week was short sighted in that their argument was specious. Commodities markets, like Bitcoin, operate largely outside of the U. The chances are that the regulatory body will eventually bite the bullet and approve an ETF product for Bitcoin.
The problem for the Winklevoss twins is that they cannot catch a break. They will be left on the sidelines and on the outside looking in, once again, watching others make fortunes while wondering if they just have a dark cloud hanging over their heads. I have introduced a new weekly service through Seeking Alpha Marketplace. Each Wednesday I will provide subscribers with a detailed report on the major commodity sectors covering over 30 individual commodity markets, most of which trade on U.
The report will give an up, down or neutral call on these markets for the coming week and will outline the technical and fundamental state of each market.
At times, I will make recommendations for risk positions in the ETF and ETN markets as well as in commodity equities and related options. I wrote this article myself, and it expresses my own opinions.
In one of my previous articles about Bitcoin, I have stated that I was never comfortable with the volatility of cryptocurrencies. In my investing experience, I tend to focus on stable, dividend-growing companies.
Bitcoin was truly an investment which was outside of my regular investing spectrum. Still, I was committed for the long term. I wanted to hold Bitcoin because I thought and still think there is much future value in cryptocurrency. So let me explain why I recently changed my mind.
Crypto forks are a lot like stock splits. Instead of one share splitting in 2 or more of exactly the same shares, a cryptocurrency splits in 2 separate types of entities.
Logically, the value of the pre-fork currency should be the same as the value of the two post-fork currencies. But recently, forks are said to be boosting the price of Bitcoin; some people even call the forks a type of dividend. During the fully-fledged stock market bubble in the 90s, companies were often not hesitant in using stock splits.
During this bubble, many people were stock picking, and companies viewed stock splits as a way to keep shares affordable for small investors. Though they did not change underlying value, these stock splits often generated excitement and a short-term price surge for the companies involved. Cryptocurrency forks have a drawback which stock splits do not have: One year ago, a Bitcoin investor would just own their Bitcoin.
If he continued to hold this Bitcoin, he currently would also have Bitcoin Cash and Bitcoin Gold, not to mention all the potential forks which could happen in the future. Not all of these forked-off cryptocurrency is supported by the same wallets, and though they all have a quoted value on exchanges, it is sometimes not easy to trade them.
I always argued that Bitcoin is so popular compared to other cryptos because it is still profiting from its first mover advantage on the cryptocurrency market.
This could be valid at the moment, and it might also still be the case in a few years. Maybe even in a few decades if Bitcoin can consolidate its position as the gold standard of crypto. I am far from sure about this, though. Many other cryptocurrencies are much better in a technological sense, and it would need many Bitcoin forks or innovations to make up for that difference.
One of the most glaring problems of Bitcoin is that its mining process unnecessarily consumes an extreme amount of electricity. A brief overview of some cryptocurrencies which are better than Bitcoin in their niches:. Bitcoin only has their first mover advantage to compete with these and many other cryptocurrencies. Though Bitcoin becoming the gold standard of cryptocurrency looks like an attractive future for it, I am getting more and more doubtful that this will be enough to thrive in the future.
I simply feel I have too much trouble picking winners in the cryptocurrency world. This is not a very straightforward argument, albeit my most important one and the reason which finally tipped the balance and made me sell half of my Bitcoin. It also seems counterintuitive: Let me first explain what I mean with late majority.
The adoption of almost every technology happens in phases, which are characterized by specific types of people which start using a technology.
After the birth of a specific technology, people who start using it quickly are called innovators. They have a higher risk tolerance than other parts of the population and are not afraid to try new things.
After the innovators, the early adopters start using a technology. Early adopters generally have a high degree of opinion leadership, which means that their opinion is held in high esteem by other parts of the population. Though they are more discrete with their adoption choices than innovators, they generally have a larger influence on the general population. The early majority and late majority are by far the biggest part of the population. These people generally start adopting a new technology if it has proven their worth to people before them, and are less likely to try new things straight away.
A difference between the early and the late majority is that the latter is usually more skeptic about an innovation. Last to adopt are the laggards , which are usually characterized by a big aversion to change and focus on traditions. They are least likely to adopt a new innovation quickly. In the graph below, you can see a depiction of the market share and the proportions of the population with regard to technological adoption.
When applying this theory to Bitcoin, we should adopt it a bit: I would use a notion of awareness here: Innovators in the Bitcoin adoption process are for instance the early miners and developers which have invested in it from the beginning. Early adopters are people who started investing in it shortly after the innovators.
I believe the early majority started to get interested in Bitcoin during the last year. Public knowledge and media coverage of Bitcoin reached a much higher gear since then: But this is good news, right? Well, history often proves otherwise.
Many a stock market crash was preceded by relatively inexperienced investors joining in.
4 Dec Tyler and Cameron Winklevoss—the brothers who tried and failed to gain control of Facebook after alleging that it had been appropriated from them—have rebounded big-time. The Winklevoss twins own one of the largest portfolios of Bitcoin in the world—and recent surges in the digital currency's value. 25 Jan The Winklevoss twins are focused on building an ecosystem to attract institutional investors and day traders to the cryptocurrency. To that end, they launched Gemini - the world's first regulated exchange for cryptocurrencies. The exchange is used to set bitcoin spot prices for futures contracts at the Chicago. 5 Dec BitInfoCharts' data also shows more than addresses with at least $,, in Bitcoin—meaning the number of Bitcoin billionaires could increase even further so long as the price continues to rise. “It only takes a little over , Bitcoins to get to a $1 billion,” CoinDesk's Baurle said in an email to .