William Essex
William Essex

Getting the measure of Bitcoin

Bitcoin is a story that wants to be written. There’s always something happening, and almost all the main characters are available for interview. Bitcoin is never boring, nor predictable. Just this morning (in late November 2014), for example, the rumour reached this laptop that Satoshi Nakamoto, the possibly pseudonymous inventor of Bitcoin, might have been working for the US National Security Agency all along. Within the past month, a former SEC chairman, Arthur Levitt, has signed up as an adviser to two Bitcoin companies; a founding director of the Bitcoin Foundation, John Matonis, has resigned; and the FBI has shut down the Silk Road 2.0 online black market. The price of a single bitcoin hit its low for the calendar year, USD326, on 4th November (source: blockchain.info) and bumped up to USD430 ten days later.

But does any of this mean we should be buying Bitcoin? Except to the extent that excitement triggers sentiment which in turn triggers volatility – and yes, there are Bitcoin hedge funds, notably GABI, Global Advisors Bitcoin Investment Fund – the over-supply of news about Bitcoin doesn’t quite add up to an immediate case for investing. Danny Masters, founder and director, Global Advisors, sees parallels between Bitcoin and the early oil market; speaking in mid-2014, Masters described both Bitcoin and early oil as “a generally rather chaotic scene”. Masters also comments that in a chaotic market that’s beginning to settle, “early-stage products are often discretionary fund managers”. Perhaps so. But for early adopters of the technology and early investors in the opportunity alike, Bitcoin funds aren’t the only way to buy into Bitcoin.   Crypto-currency trading opportunities Central to today’s crypto-currency “chaos” are issues...continued

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