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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
USD/JPY goes on a roller-coaster ride prompted by geopolitical risk
USD/JPY whipsaws lower and then higher on alternating risk-on risk-off caused by Middle East tensions. Governor Ueda talks about defending the Yen from further weakness and currency-induced imported inflation. USD/JPY price chart shows bearish Hanging Man forming, boding ill for future price action.
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.
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