Posted on

Crypto Critics Queue As Markets Tumble

As widely expected Bitcoin and crypto currency markets corrected this week and retraced from previous all-time price highs. As if waving the flag to the bull, the big bankers came out to take swings at the digital currency stating that it was both a ‘threat to financial stability’ and a ‘fraud’.

Bitcoin took a double whammy this week from the Federal Reserve Bank and Goldman Sachs chief executive. Newly-installed Fed Vice Chairman for Supervision Randal Quarles raised concerns about crypto currencies while speaking on payments systems. His main issues were how they would behave in a crisis, thoughts likely spurred by the 20% market drop in recent days. During times of economic uncertainty there would be increased demand for liquidity among bank depositors putting major financial institutions under strain.

Being decentralized Bitcoin and cryptos have no controlling central authority or bank and are exchanged using encryption. One of his claims was that the currency or asset was not backed by other secure assets and therefore had no intrinsic value.  Quarles went on to warn “While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage.”

This would pose a very real threat to financial institutions if crypto currencies could not be exchanged for fiat (US dollars) at a stable exchange rate during times of adversity. Without directly making reference the implication is that crypto exchanges receiving fiat are not likely to have the reserves of them to pay out if the majority of their customers want to sell at the same time.

Goldman Sachs CEO Lloyd Blankfein also waded in with “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.” This echoes earlier comments by JP Morgan boss Jamie Dimon who described Bitcoin as a fraud that would ultimately blow up, stating it was only fit for use by drug dealers, murderers and North Koreans. Later reports emerged accusing him of market manipulation.

In the same week that Nasdaq made moves to allow Bitcoin futures trading Goldman Sachs stated that they did not need or want a Bitcoin strategy, citing volatility and lacking in liquidity as the reasons. Additionally Deputy Governor of the Bank of England, Sir Jon Cunliffe, said that crypto currencies were way too small to pose a threat to the global economy.

Decentralized crypto currencies are often seen as a threat to large financial institutions and banking bosses who rake in millions of dollars in profits from the control and manipulation of other people’s money.

Posted on

Bitcoin’s Fame and Support Grows as Critics Fade Away: Mark Cuban to Invest

Billionaire investor and Dallas Mavericks owner Mark Cuban, in an interview for Bloomberg’s Emily Chang at the Vanity Fair New Establishment Summit in Los Angeles – confirmed his investment in Bitcoin [BTC].

For a longer time now, Mark Cuban has indicated out plans to invest in Bitcoin and following Altcoins. This came true on Oct 3 when Cuban had declared that BTC purchase from his side through a Swedish Bitcoin exchange-traded fund ETN XBT provider has taken place, which is traded on Nasdaq Nordic.

XBT Provider is the same bitcoin ETN provider which JPMorgan clients used to invest in bitcoin. In September, it was revealed by bitcoin developer Andrew DeSantis and prominent bitcoin trader IamNomad that custodian accounts of JPMorgan Securities Ltd had processed various transactions to the accounts of XBT Provider, processing investments into the Swedish bitcoin ETN.

It was very highlighted during the interview by Cuban that the baseless condemnation of Bitcoin by very well-known business figures like Jamie Dimon are very inaccurate because the term of intrinsic value in assets and stocks is fundamentally flawed. The price and value changes on supply and demand, while the value of traditional currencies can be manipulated and changed that why there is no intrinsic value:

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply and demand. I have bought some through an ETN based on a Swedish exchange.”

Highly regarded and respected venture capitalist and Golden State Warriors owner Chamath Palihapitiya offered a similar criticism toward Dimon as Cuban, noting that the value of bitcoin depends on the market and that the government has limited power in restricting and regulating bitcoin.

“[Bitcoin is] absolutely not [a fraud]. It cannot be a fraud. What countries can constrain today is how it [bitcoin] is effectively traded but it cannot be controlled. It is a fundamentally distributed system that exists peer to peer. And so to the extent that you can basically eliminate the will and the actions of every single person in the world, you can eliminate it. But in the absence of that, the genie is fundamentally out of the bottle,” said Palihapitiya.

The virtual currencies and bitcoin evolves as a technology, very high profile and respected figures of the market and business will be adopting bitcoin and showcase more interest towards it. This is concluding with recognition of benefits for using bitcoin as a decentralized network by general consumers and users.

Read Also:

Posted on

Critic Continues: “Bitcoin Is of No Value” – Jamie Dimon Returns

Jamie Dimon – Chief Executive of JPMorgan is back taking on main stage with his criticism on Bitcoin as a value and cryptocurrency expanding even further more. The main highlighted part of his recent comments is that “Bitcoin will be ending badly with its market”. [Jamie Dimon to CNBC]

From his point of view J Dimon stated to CNBC that a wave of breakdowns will occur for digital currencies in general because of Bitcoin, Ethereum and ICO (Initial Coin Offerings). This ‘phenomenon’ will experience a GOVs crackdown sooner than later.

He believes that officials, regulators will take action with imprisonment for whoever uses or trades the cryptocurrency, pushing it low as the black market.

“Right now these crypto things are kind of a novelty. People think they’re kind of neat. But the bigger they get, the more governments are going to close them down,”

The negative opinionated thought towards virtual currencies from the CEO expanded its branches on comments from him to the Economic Times in India, adding that cryptocurrencies or any value should not come from thin air:

“We already have digital currencies … you can have digital rupee, so I am not against digital currencies,” he said.

“I am talking about the creation of money and value out of thin air,” he continued. “Governments now look at it like it’s a novelty but the bigger it gets the less of a novelty it becomes.”

The noted out thought about Bitcoin from Jamie Dimon is the continuation of the last weeks reply to CNBC as he called bitcoin a “fraud” and would fire any employee trying to trade BTC.

However, a complaint has been filed towards Dimon by Schweitzer – a managing partner of Blockswater, which is a London based trading firm. The accusation comes from a Swedish based regulator as it has been asked by Schweitzer for market abuse.

Read Also:

– For more Cryptocurrency market related Updates and News Follow us on our Facebook and Twitter pages.