The Bitcoin Boomlet Comes to Local Government

Link: https://www.governing.com/finance/the-bitcoin-boomlet-comes-to-local-government.html

Excerpt:

Lastly, Bitcoin is an investment vehicle that, if held in the city’s treasury, could help Miami’s fiscal prospects. After all, a currency whose per-unit value has increased 18,641 percent the last five years is more tempting than a currency that gradually declines in value. 

But just as Bitcoin has proven upwardly volatile, that volatility can spike downward (such as when Bitcoin lost one-third of its value in a two-week period in 2017). This means that any money Miami invests in Bitcoin could plummet in value if Bitcoin crashes. 

There are also technical issues with Bitcoin. The mining process consumes lots of energy, making it expensive and environmentally hazardous to produce. Bitcoin has an average transaction fee of $23, and relatively long processing times of between 10 minutes and several hours. And there are questions about whether, once all 21 million bitcoins are mined, monetary incentive will exist for the network of nodes to continue maintaining the blockchain. 

Author(s): Scott Beyer

Publication Date: 22 March 2021

Publication Site: Governing

McAfee Indicted for Fraud, Money Laundering Conspiracy Crimes

Link: https://www.ai-cio.com/news/mcafee-indicted-fraud-money-laundering-conspiracy-crimes/

Excerpt:

John McAfee, founder of cybersecurity software company McAfee, has been indicted on multiple charges stemming from two purported schemes relating to the allegedly fraudulent promotion of cryptocurrencies. Jimmy Watson, who served as an executive adviser on McAfee’s “cryptocurrency team,” was also charged in the indictment.

According to the allegations in the complaint, which was unsealed in Manhattan federal court, the first of the two schemes involved a fraudulent practice called “scalping,” also known as a “pump-and-dump” scheme. As part of the alleged scheme, McAfee, Watson, and other associates allegedly bought large quantities of publicly traded cryptocurrency altcoins at low market prices, knowing that McAfee planned to publicly endorse them on his Twitter account, which had approximately 784,000 followers.

Author(s): Michael Katz

Publication Date: 12 March 2021

Publication Site: ai-CIO

RIP Gold. Killed by Bitcoin

Excerpt:

Can the store of value argument hold up for BTC without it being a medium of exchange? It has for gold for thousands of years so quite possibly. Gold is money but it’s not readily usable currency. BTC could be considered in the same light.

The artificiality of BTC’s value is a problem. It can be argued using cultural relativism that gold is no more intrinsically valuable than BTC. But it does have a long history, especially as a reserve currency, that must be worth something. Can we see central banks buying BTC? Certainly not if it develops as a parallel medium of currency that undermines them.

Likewise, gold is the outcome of production. BTC consumes resources to produce nothing. Not that that is necessarily a problem in a virtual world but it again weighs against the perception of BTC as a store of value. So does the fact that BTC is a truly useless item if some kind catastrophe befalls society which does underping the value of gold in some measure.

Author(s): David Llewellyn-Smith, Yves Smith

Publication Date: 4 March 2021

Publication Site: naked capitalism

What happens if bitcoin succeeds?

Link: https://voxeu.org/article/what-happens-if-bitcoin-succeeds

Excerpt:

In a week when bitcoin is setting records with a market value exceeding a trillion dollars, what would it mean if cryptocurrencies succeed? 

The only reason all the bitcoins are worth a trillion dollars is the expectation of success, as they are not very useful today. Cryptocurrencies must provide some valuable service if they are to justify their high valuation, otherwise holding bitcoin is just like collecting stamps or beanie babies – a minority activity that does not justify the current $51,000 price.

But what is the valuable service that makes bitcoin successful? 

Author(s): Jon Danielsson

Publication Date: 26 February 2021

Publication Site: Vox EU

Dogecoin Has a Top Dog Worth $2.1 Billion

Link: https://www.wsj.com/articles/dogecoin-has-a-top-dog-worth-2-1-billion-11613559022?mc_cid=4b04f7e31f&mc_eid=983bcf5922

Excerpt:

The dogecoin market has a pack leader.

Records show that a person, or entity, owns about 28% of all of the cryptocurrency in circulation—a stake worth about $2.1 billion at current prices. The holder’s identity isn’t known, which is common in the opaque world of digital currencies.

It is hard to tell what to make of this giant position in what has long been a small and niche corner of the cryptocurrency world.

Dogecoin was created in 2013 as a satirical homage to bitcoin. Its developers were riffing off the meme of a Shiba Inu dog with bad spelling habits. It wasn’t designed to be used as a form of payment, or as anything except a joke. At the start of 2021, a dogecoin was worth about half a cent, even as bitcoin prices had surged to nearly $30,000.

Author(s): Caitlin Ostroff

Publication Date: 17 February 2021

Publication Site: Wall Street Journal

So … Is Bitcoin Going to Replace the Dollar?

Link: https://www.ai-cio.com/news/bitcoin-going-replace-dollar/

Excerpt:

Bitcoin has been on a roll lately, rising in price five-fold over the past 12 months. Meanwhile, the US dollar, the world’s reserve currency, has lost 9% of its value.

All this has buoyed talk that someday Bitcoin in particular, or cryptocurrency in general, will replace the buck. Well, forget about that, argues St. Louis Federal Reserve President James Bullard, invoking the lessons of pre-Civil War days to warn about the chaos brought by a world of nonuniform currencies—that would be one where the buck isn’t king. 

Appearing on CNBC Wednesday, he predicted that “it’s going to be a dollar economy as far as the eye can see—a dollar global economy really as far as the eye can see—and whether the gold price goes up or down, or the Bitcoin price goes up or down, doesn’t really affect that.”

Author(s): Larry Light

Publication Date: 18 February 2021

Publication Site: ai-CIO

Growing Number of Pension Funds, Endowments, Foundations Adding Bitcoin to Portfolios

Link: https://www.ai-cio.com/in-focus/market-drilldown/growing-number-pension-funds-endowments-foundations-adding-bitcoin-portfolios/

Excerpt:

The number of pension funds, endowments, and foundations adding Bitcoin to their portfolios has steadily risen over the past couple of years as the digital asset has gained more acceptance as an alternative asset.

Two pension funds in Fairfax, Virginia, began investing in late 2018 and 2019 in blockchain technology and Bitcoin through investments in two Morgan Creek Digital funds, which many consider the first investments in the crypto asset from a US pension fund. And a number of hedge funds, family offices, pension funds, endowments, foundations, asset managers, registered investment advisers (RIAs), and banks own Bitcoin outright through Boston-based Fidelity Digital Assets.

The world’s largest asset manager, BlackRock, recently said it is entering into the cryptocurrency business, according to US Securities and Exchange Commission (SEC) filings. BlackRock, which manages  $8.7 trillion, said in its SEC filings that it is seeking to add the Bitcoin futures investments to the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Fund.

Author(s): Ellen Chang

Publication Date: 11 February 2021

Publication Site: ai-CIO

Bitcoin hits $50,000 for first time

Link: https://www.economist.com/graphic-detail/2021/02/16/bitcoin-hits-50000-for-first-time

Graphic:

Excerpt:

IT IS HARD to think of anything that has baffled financial analysts as much as the rise of bitcoin. When the digital currency lost over 80% of its value in 2018, many wondered if the crypto bubble had burst. But in the second half of last year bitcoin and other cryptocurrencies began to climb again. The price of the popular digital token has now passed $50,000, about five times as much as a year ago.

Publication Date: 16 February 2021

Publication Site: The Economist

Growing Number of Pension Funds, Endowments, Foundations Adding Bitcoin to Portfolios

Link: https://www.ai-cio.com/in-focus/market-drilldown/growing-number-pension-funds-endowments-foundations-adding-bitcoin-portfolios/

Excerpt:


The number of pension funds, endowments, and foundations adding Bitcoin to their portfolios has steadily risen over the past couple of years as the digital asset has gained more acceptance as an alternative asset.

Two pension funds in Fairfax, Virginia, began investing in late 2018 and 2019 in blockchain technology and Bitcoin through investments in two Morgan Creek Digital funds, which many consider the first investments in the crypto asset from a US pension fund. And a number of hedge funds, family offices, pension funds, endowments, foundations, asset managers, registered investment advisers (RIAs), and banks own Bitcoin outright through Boston-based Fidelity Digital Assets.

Author(s): Ellen Chang

Publication Date: 11 February 2021

Publication Site: ai-CIO