James Angel, Professor of Finance at Georgetown University, on Bitcoin popularity and its future prospects
Currently Bitcoin is the world’s fastest growing currency. What are the main features of Bitcoin and why investors’ interest in Bitcoin is increasing?
I agree that Bitcoin is "the world's fastest growing currency". Bitcoin is an attempt to create an electronic currency that is not controlled by a government. It is controlled by a computer standard that allegedly limits the total number of bitcoins that can be created. Right now, bitcoins are created ("mined") by computers that do calculations to verify Bitcoin transactions. Bitcoin has attracted quite a bit of interest from four distinct groups:
1) "The end-is-near" types, who fear financial doomsday, view Bitcoin as a potential inflation-free haven similar to an electronic gold standard.
2) Cyber-libertarians, who see the near anonymity and lack of government oversight as an attraction.
3) Operators in the underground economy such as the infamous Silk Road web site, who perceive Bitcoin as a payment system for drug purchases, money laundering, etc.
4) Entrepreneurs, who want to cash in the fad. Indeed, given that the total number of bitcoins will allegedly be fixed, the total growth will soon be zero.
Bitcoin is traded online without any kind of central bank or institutional supervision, thus making the currency attractive to drug dealers, terrorists. Do you see that further Bitcoin trading might be restricted or even prohibited to prevent tax fraud, money laundering, and other illegal activities?
Governments will do everything in their power to crack down on money laundering and tax fraud. This means that in order for Bitcoin to be anything other than an underground service on the run from the authorities, the institutions that operate in the Bitcoin realm will have to be regulated just like other financial institutions. There are very good reasons why we regulate financial institutions to protect the public from fraud and to protect the economy from financial meltdowns. Governments will expect payment processors in the Bitcoin realm to be regulated just as they are for other currencies.
Currently Bitcoin is the world’s fastest growing currency. What are the main features of Bitcoin and why investors’ interest in Bitcoin is increasing?
I agree that Bitcoin is "the world's fastest growing currency". Bitcoin is an attempt to create an electronic currency that is not controlled by a government. It is controlled by a computer standard that allegedly limits the total number of bitcoins that can be created. Right now, bitcoins are created ("mined") by computers that do calculations to verify Bitcoin transactions. Bitcoin has attracted quite a bit of interest from four distinct groups:
1) "The end-is-near" types, who fear financial doomsday, view Bitcoin as a potential inflation-free haven similar to an electronic gold standard.
2) Cyber-libertarians, who see the near anonymity and lack of government oversight as an attraction.
3) Operators in the underground economy such as the infamous Silk Road web site, who perceive Bitcoin as a payment system for drug purchases, money laundering, etc.
4) Entrepreneurs, who want to cash in the fad. Indeed, given that the total number of bitcoins will allegedly be fixed, the total growth will soon be zero.
Bitcoin is traded online without any kind of central bank or institutional supervision, thus making the currency attractive to drug dealers, terrorists. Do you see that further Bitcoin trading might be restricted or even prohibited to prevent tax fraud, money laundering, and other illegal activities?
Governments will do everything in their power to crack down on money laundering and tax fraud. This means that in order for Bitcoin to be anything other than an underground service on the run from the authorities, the institutions that operate in the Bitcoin realm will have to be regulated just like other financial institutions. There are very good reasons why we regulate financial institutions to protect the public from fraud and to protect the economy from financial meltdowns. Governments will expect payment processors in the Bitcoin realm to be regulated just as they are for other currencies.
Editors’ Picks
EUR/USD revisits 1.1780, or daily lows
EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to reach daily troughs on Thursday. The pair’s decline comes in response to a sudden bout of USD strength amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.
GBP/USD makes a U-turn, challenges 1.3500
GBP/USD rapidly leaves behind Wednesday’s strong advance, putting the 1.3500 support to the test on Thursday. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.
USD/JPY recovers above 156.00 despite cautious markets
USD/JPY is cutting losses to regain 156.00 in the European session on Thursday. The pair recovers alongside the US Dollar, but the further upswing appears limited amid hawkish BoJ commentary, looming intervention fears and risk-off mood, which continue to support the Japanese Yen. US-Iran nuclear talks take center stage.
Editors’ Picks
EUR/USD revisits 1.1780, or daily lows
EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to reach daily troughs on Thursday. The pair’s decline comes in response to a sudden bout of USD strength amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.
GBP/USD makes a U-turn, challenges 1.3500
GBP/USD rapidly leaves behind Wednesday’s strong advance, putting the 1.3500 support to the test on Thursday. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.
Gold sticks to the bid bias, flirts with $5,200
Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The precious metal adds to Wednesday’s optimism despite the Greenback trades in a firm fashion, although geopolitical tensions in the Middle East keep the yellow metal bid for now.
Stellar: Relief bounce fades as bearish undertone persists
Stellar is trading around $0.16 at the time of writing on Thursday after rebounding more than 8% in the previous day. Derivatives data paints a negative picture as XLM’s short bets hit a monthly high while Open Interest continues to decline.
Changing the game: International implications of recent tariff developments
The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.
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