Bitcoin’s days are numbered – literally. Ex-Federal Reserve Bank examiner, Mark T.Williams even goes so far as to predict that Bitcoin will trade for under $10 by June 30, 2014. That’s a bold prediction, no doubt, but the point is clear – Bitcoin doesn’t stand a chance at ever gaining widespread adoption.
So says Louis Basenese (wallstreetdaily.com) in edited excerpts from his original article* entitled The Exact Date for Bitcoin’s Final Crash to $0.00.
[The following is presented by Lorimer Wilson, editor of www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Basenese goes on to say in further edited excerpts:
Like a Thief In the Night
One of the most prominent Bitcoin exchanges, Mt. Gox, disappeared last week. Like a thief in the night, it moved offices, shuttered its Twitter account and closed down its website – without any explanation – and just like that, every sucker who owned any Bitcoins on the exchange lost everything. As a result, ex-Federal Reserve Bank examiner, Mark T. Williams, says that the “high-profile collapse could trigger a Lehman Brothers-type chain reaction throughout the Bitcoin market.”
Trouble has been brewing at Mt. Gox, which once handled 80% of all Bitcoin trading, ever since it halted customer withdrawals on February 7. That was supposed to be a temporary move, whereas this one appears permanent because, in the aftermath of the sudden closure this week, documents surfaced revealing that Mt. Gox held just 2,000 Bitcoins, while customer deposits totaled almost 625,000 Bitcoins.
The reason for the discrepancy? Theft! As a result of a technological vulnerability, hundreds of thousands of Bitcoins, worth more than $300 million, were stolen. The size of the heist represents about 6% of all the Bitcoins in circulation. which means:
- Mt. Gox has been operating as a sham this whole time
- the masses will ever put any trust in Bitcoins. How can they after a development like this?
So Much For Self-regulation
Ultimately, the failure of Mt. Gox proves that self-regulation doesn’t work. Even diehard Bitcoin believers realize this. Last month, Jeremy Liew, a leading Bitcoin investor at Lightspeed Venture Partners, vigorously opposed regulation. Now he thinks it’s an absolute must for mainstream adoption.[Isn’t]…freedom from regulation [supposed to be] the whole point of the Bitcoin experiment? That’s how all the early adopters pitched it, at least, but we can go ahead and flush that pipedream down the toilet.
Like good opportunists, the two largest remaining exchanges, BTC-e and Bitstamp, are trying to fill the void left by Mt. Gox but, as the saying goes, when there’s one cockroach, there are many more or, as ex-Federal Reserve Bank examiner Williams asserts, “The problems at Mt. Gox are not isolated; they are systemic to the Bitcoin industry.” Indeed. What happened at Mt. Gox could happen anywhere else. Hackers are that good and, with Bitcoin prices still above $500, more than enough incentive exists.
Bitcoin On Its Way to $10.00?
The downward trend in average Bitcoin prices, excluding the Mt. Gox exchange, continues to this day.
Bitcoin’s days are numbered – literally. Williams predicts that Bitcoin “will trade for under $10″ by June 30, 2014. That’s a bold prediction, no doubt, but the point is clear – Bitcoin doesn’t stand a chance at ever gaining widespread adoption.
Dennis Gartman says bluntly, Bitcoin is “nothing more than a scam of the first order.” My advice? The same as Gartman’s: Utter and complete avoidance of all things Bitcoin related.
If you’re absolutely dead set on throwing away some money, consider technology blogger extraordinaire John Gruber’s approach:
“In lieu of Bitcoin, I’ve stuck to flushing $100 bills down a toilet. I’m deep in the red, but at least I understand exactly what’s going on.”
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.wallstreetdaily.com/2014/02/27/bitcoin-2/ (© 2014 Wall Street Daily, LLC. All rights reserved.)
Related Articles: (Please note: The articles posted on munKNEE.com deliberately present a diverse perspective on subjects discussed. Below are links, with introductory paragraphs, to a variety of related articles designed to help you become truly informed regarding both sides of the issues so that you can assess the merits of all points of view and come to your own conclusion.)
All the hype surrounding Bitcoin is a dead giveaway that you should be suspicious. Forget all the economic arguments against the currency, though. The biggest risk is a technological one. Add in the neck-snapping volatility, and you’re telling me this is the future of money? Keep dreaming! It’s little more than a wild speculation. One with a fatal flaw, at that, so please, whatever you do, refrain from converting your life savings – or any meaningful amount of money – into Bitcoins. At least until you read this article. Read More »
Due to concerns about inflation and money printing, the last 20 years has seen an incredible number of new developments in the world of money. This infographic shows how gold got digital, how digital currencies exploded into life and who the key players are in this global story. Read More »
What currency is feared by the European Central Bank as a threat to fiat monetary institutions? What currency is cash-like but digitally transmittable allowing for ultimate anonymity and global mobility? What digital currency is up over 2,200% over the last year? It’s Bitcoin. Read More »
Ever since the Federal Reserve embarked on its easy money campaign, everyone and their mother has been on a crusade for an alternative reserve currency. [The euro and China’s yuan have been talked about – and dismissed – as realistic contenders and]…during the world’s desperate search, the Federal Reserve has just continued printing more money. That has only intensified the desire for an alternative. Enter Bitcoin. Ultimately, however, it is all about greed – not a genuine interest in a fundamentally stronger alternative to the status quo – that’s driving Bitcoin prices so forget Bitcoin being a contender as an alternative currency. At best, it’s a speculative investment, and a very speculative one at that. Read More »
What currency is feared by the European Central Bank as a threat to fiat monetary institutions? What currency is cash-like, but digitally transmittable allowing for ultimate anonymity and global mobility? What digital currency is up over 2,200% over the last year? The answer? Bitcoin. Read More »
I’ve become interested in this whole Bitcoin thing, the electronic currency first was issued about 3 years ago, and I think it is fascinating – and troubling. Here’s why. Read More »