Bitcoin Is Not a ‘Fraud,’ It is Not for Long-Term Investors

Bitcoin Is Not a ‘Fraud,’ It is Not for Long-Term Investors

Bitcoin Is Not a ‘Fraud,’ It is Not for Long-Term Investors

$BTCUSD, $CME, $CBOE

Many economic guru do not think Bitcoin is a “fraud” but do not recommend it for long-term investors.

Bitcoin is currently trading at $11,381. 8154, +233.261, or 2.09% in the world market.

Anyone looking to put money into Bitcoin needs to separate the issue into 2 categories, they are:

  1. The blockchain technology
  2. The product

The Big Q: Will Bitcoin become a currency?

Notably, 2 major US exchanges, including the parent of the venerable Chicago Mercantile Exchange (NASDAQ:CME), haveembrace Bitcoin, dragging federal regulators into a realm skeptics call a fad and fraud.

The development shows how some big financial players are moving to co-opt the volatile cryptocurrency and lure more mainstream investors into the market, even before regulators have agreed on just what Bitcoin is or is not.

If you’re a long-term investor, buying Bitcoins here is not a good strategy investment strategy.

There is a presumption by many Bitcoin advocates that it will become a currency. When you become a currency, you have massive adoption. That’s what a currency means, it is liquid immediately, it is not liquid now.

The 2nd bit is what gives me some problems. We do not see Bitcoins attracting the amount of adoption that is seen in the price today.

The blockchain payment systems technology that powers Bitcoin has been hailed by many on Wall Street.

Blockchain a major, major advance expected to be used increasingly in both the private and public sectors.

Meanwhile, CME Group Inc.’s (NASDAQ:CME) contracts will debut on 18 December.

Cboe Global Markets Inc. (NASDAQ:CBOE) did not announce a start date.

Both giant exchanges got the Green Light Friday after going through a process called self-certification — a pledge to the US Commodity Futures Trading Commission (CFTC) that the products do not run afoul of the law.

The moves are big business for Wall Street professionals, including institutional investors and high-speed traders who’ve been eager to bet on cryptocurrencies and their wild swings, but were worried about trading unregulated markets.

The new products are subject to CFTC oversight.

CME, Cboe and Cantor Fitzgerald LP’s Cantor Exchange, which is creating another kind of Bitcoin derivative, binary options promised to help the agency surveil the underlying Bitcoin market.

“Bitcoin, a virtual currency, is a commodity unlike any the commission has dealt with in the past,” CFTC Chairman Chris Giancarlo said in a statement Friday. “We expect that the futures exchanges, through information sharing agreements, will be monitoring the trading activity on the relevant cash platforms.”

Trading in Bitcoin and other cryptocurrencies is largely unregulated, and that is Key.

Bitcoin was introduced in the wake of the Y 2008 financial crisis as a way of avoiding governments and central banks. Now with its meteoric rise and the proliferation of cryptocurrencies, banks, brokers and mainstream investors want in. And they want regulation, something they will get a lot of in a market like CME or Cboe’s.

It has been a volatile week for the biggest and best-known cryptocurrency.

Wednesday, Bitcoin broke through $10,000, then ran past $11,000 less than 12 hours later to an all time-high of $11,395, and then plunging around 20% in the hours that followed.

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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