Bitcoin Bonanza Rolls On

Matt Thalman - INO.com Contributor - ETFs


As the Bitcoin phenomenon rolls on, we continue to see new prospectuses for possible Bitcoin funds despite the Securities Exchange Commission denying the creation of one Bitcoin Exchange Traded Fund due to the lack of market surveillance and regulation. Oddly enough, the currency was started to give its user autonomy from governments and other regulatory agencies.

So the main reason why the currency grew in popularity is the reason why investors are finding it difficult to invest in the asset. Thus far two different proposed Exchange Traded Funds have been denied in the US, but it would appear the once denied Winklevoss Bitcoin ETF might have a chance of being approved the second time around. What is interesting is that the Winklevoss Twins were not the ones who filed the petition for reconsideration of their ETF, it was the Bats exchange, which the proposed ETF would trade on if approved. Continue reading "Bitcoin Bonanza Rolls On"

Bitcoin Is NOT The New Gold

Lior Alkalay - INO.com Contributor


Last week, the price of one Bitcoin surged above $1,227, the price of an ounce of Gold. And the headlines soon followed, screaming, “Bitcoin worth more than Gold.” The implication, of course, that Bitcoin is the new Gold in the world. In reality, however, Bitcoin is hardly the “new” Gold, real or digital.

In arguing for Bitcoin’s allure, enthusiasts tend to fall back on one singular point; like real Gold, there is but a finite number of Bitcoin that could be mined (21 million to be exact). But that is hardly the case. Bitcoin’s allure is not a factor of its rarity, but rather its ecosystem. That ecosystem enables financial transactions between two parties, both anonymously, and at very low costs. The fact is that that ecosystem could be easily replicated with an alternative to Bitcoin. So, while the number of Bitcoins we can mine is limited, the amount of alternative ecosystems that could emerge for Bitcoin wannabes is not. In fact, even today, there are already 12 different alternatives to Bitcoin, including Litecoin, Peercoin and Primecoin.

However, there is one area in which Gold and Bitcoin have something in common and, unfortunately, for Bitcoin bulls, it is in their vulnerability rather than strength. Both Bitcoin and Gold do not pay interest like a currency, nor a dividend like a stock. And when interest rates rise the allure of Bitcoin and Gold quickly fades. Because, simply put, there are better alternatives. Continue reading "Bitcoin Is NOT The New Gold"