Displaying items by tag: bitcoin

(New York)

Goldman Sachs released a key report to its clients this week detailing…see the full story on our partner Magnifi’s site

(New York)

Most bitcoin investors know it, but few else do: the bitcoin industry is ultra energy intensive as bitcoin mining takes mountains of electricity. Because of this, the surge in interest in ESG is casting a pall over the bitcoin frenzy. One research analyst summarized the situation very nicely, saying “Many companies have cozied up to Bitcoin in order to associate themselves with the digital currency’s technological mystique … As ESG funds start to flee Bitcoin, its price will begin a downward spiral. Stay away”.

FINSUM: This makes absolute sense. Bitcoin is highly energy inefficient, and therefore the combination of ESG considerations and likely government regulations make bitcoin look quite unattractive over the long term.

(New York)

In a sign of just how far Bitcoin and other cryptocurrencies have fallen from their heights, the CBOE has just scrapped its plans to continue to offer Bitcoin futures. Creating mainstream products around Bitcoin was all the rage until recently, but Wall Street’s appetite for doing so has tumbled alongside cryptocurrencies’ prices. Godman Sachs’ plans to create a bitcoin trading desk, much discussed early last year, have yet to materialize.

FINSUM: Have cryptocurrencies reached their zenith? In terms of prices, things are way off (Bitcoin at $20,000 in December 2017 to $4,000 now), but what about in terms of their place in the financial system?

(New York)

We do not cover Bitcoin very much, but we thought it would be worthwhile to give an update today, especially as advisors may have some clients who are very interested in the area. Most are aware that the cryptocurrency has plunged from late last year, but had been enjoying a minor rally of late. That has come to end abrupt end though, capped off by another SEC rejection/delay of a Bitcoin ETF. The SEC delayed a decision on a new Bitcoin ETF until the end of September, which sent the market plunging ~8%. Bitcoin is now trading around $6,500, way down from its $20,000 peak.

FINSUM: This newest Bitcoin delay is more worrisome as it was the most promising proposal on the table. The proposal, in part from top ETF provider Van Eck, was to actually hold Bitcoin instead of Bitcoin futures, which one would think would alleviate some of the SEC’s worries. We think this will eventually make it through, and when it does, Bitcoin might become a more mainstream asset class.

(New York)

The idea of bitcoin being a 21st century version of gold, a digital value store for the next generation, has become prevalent. However, Barron’s argues, and we second, the idea that Bitcoin can never be gold. The idea comes from a new paper out of the University of Chicago. The core reason why?: It is simply not as secure. If you pay close attention to the headlines, Bitcoin is being hacked and stolen left and right. Even worse, the more valuable Bitcoin becomes, the more it is stolen. The same cannot be said for gold.

FINSUM: The paper argues that bitcoin will never play more than a “bit role” in the global financial system because of its fundamental vulnerability to theft. It sounds like the cryptocurrency needs a digital Fort Knox.