http://www.zerohedge.com/news/2013-11-10/bitcoin-plunges-25-government-scrutiny-first-btc-fair-value-reco-has-stunning-price-
Submitted by Tyler Durden on 11/10/2013 12:39 -0500
http://hat4uk.wordpress.com/2013/11/10/investing-how-global-money-fraud-by-the-authorities-is-helping-bitcoin-boom/
( BitCoin will be targeted and fought - unless it becomes captured by the Banksters and / or their facilitators , because of what it represents ..... )
As BitCoin Plunges 25% On Government Scrutiny, The First BTC "Fair Value" Reco Has A Stunning Price Target
It took literally minutes following our report from yesterday that in addition to the ECB and Fed, it was the Senate's turn to finally shine the spotlight on the most notorious electronic currency with a hearing titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies" next Monday, for Bitcoin to tumble 25% from its all time high just shy of $400, to $290 within 12 hours, in large part answering our rhetorical question if "the one thing that can finally end the dream of BitCoin holders arrive soon: when the government, and existing monetary authorities, start taking it seriously." They appear to be doing just that, which is why additional upside from here may be in the eye of the Cray supercomputer-armed NSA beholder.
So yes: Bitcoin is volatile. Very. That much is clear. But what is not so clear, and perhaps a key reason for this volatility, is just what the fundamental, or intrinsic value of BitCoins is when one strips away the pure euphoric momentum to the upside or downside.
To answer that question, we go to Raoul Pal, head of the Global Macro Investor, and his November 1st recommendation to "Buy Bitcoins"(when BTC was $210 so nearly a 100% return in 1 week) which among other things attempts to "value BTC using a macro framework" or, in other words, the first supply-demand driven fair value assessment of BTC.
His take, and price target, in a nutshell:
A fudge, but not a stupid oneLet’s use a broad guesstimate. One Bitcoin should theoretically be worth 700 ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal eachother.One BTC is currently worth 0.14 ounces of gold.That gives BTC an upside of 5000 times to equal the current price of gold, supply adjusted. Clearly, I and everyone else believes that Gold may well be much higher than here in the next 5 to 10 years, thus versus the US Dollar the upside for BTC could be multiples of that.Now, before you shake your head, simply go back to the chart of Gold versus the US Dollar and just recognise that it has risen 8750% since the 1920s. And just remember that Microsoft rose 61,000% from its IPO to it’s peak.Considering what we know about the world, I personally believe that Bitcoin may well explode in value as more and more people begin to use it.If you stuck $5,000 into Bitcoins and each Bitcoin did go up to a gold equivalent of let’s say, only 100 ounces of gold (not the potential fair value of 700), then at current prices your Bitcoin stash would be worth $3.3m.Now that’s what I call a tail-risk option. It’s either worth zero or it’s worth a truly outstanding amount of money.I bet you never thought you’d see this in a macro publication. But I’m serious. This just might work.
Read on in the attached pdf below (link)
http://www.zerohedge.com/news/2013-11-09/bitcoin-touches-400-senate-starts-asking-questions-does-fed
As BitCoin Touches $400 The Senate Starts Seeking Answers... As Does The Fed
Submitted by Tyler Durden on 11/09/2013 12:38 -0500
Moments ago BitCoin hit $395, and will likely cross $400 in the immediate future (the chart looks a little less scary in log scale).
So as more and more pile into the electronic currency, some due to ideological reasons, some simply to chase momentum, some out of disappointment with the manipulated gold price looking to park their savings in an alternative, non-fiat based currency, which a year ago traded 40 times lower, the attention of the government is finally starting to shift to what has been the best performing asset class in the past year, outperforming even the infamous Caracas stock market.
Which means one thing: Congressional hearings.
The U.S. Senate Committee on Homeland Security and Governmental Affairs will meet on Nov. 18 “to explore potential promises and risks related to virtual currency for the federal government and society at large,” it said in a statement today.The hearing, titled “Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies,” will invite witnesses to testify about the challenges facing law enforcement and regulatory agencies, and include views from “non-governmental entities who can discuss the promises of virtual currency for the American and global economies.”“Bitcoin is obviously getting a lot of attention from the federal
government on the regulatory side,” Nicholas Colas, an analyst at ConvergEx Group, said in an interview. “Given the involvement of the currency in illegal activities, that is entirely warranted. I expect these hearings to be largely informational, which is good for Bitcoin.”“The architecture of the system is elegant from a computer-science perspective, but hard for a non-tech person to understand,” Colas said. “Getting industry professionals to close this gap will be very helpful.”
Or not. Because the only thing the government does when its interest is piqued by something, anything, especially things that have to be looked in log-scale, is to promptly regulate it and then tax it, not necessarily in that order. Just how it will achieve this with Bitcoin remains unclear but one thing is certain: it will try.
Especially, now that even the Fed is looking at BitCoin when a few days ago the Chicago Fed issued 'Bitcoin: A primer" in which the Fed states quite simply:
So far, the uses of bitcoin as a medium of exchange appear limited, particularly if one excludes illegal activities. It has been used as a means to transfer funds outside of traditional and regulated channels and, presumably, as a speculative investment opportunity. People bet on bitcoin because it may develop into a full-fledged currency. Some of bitcoin’s features make it less convenient than existing currencies and payment systems, particularly for those who have no strong desire to avoid them in the first place. Nor does it truly embody what Hayek and others in the “Austrian School of Economics” proposed. Should bitcoin become widely accepted, it is unlikely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable.
Finally, while the Fed may be late to the game, the ECB has already made its feelings on BitCoin well-known long ago: recall from over a year ago: "The ECB Explains What A Ponzi Scheme Is; Awkward Silence Follows" in which the European central banks didn't mince its words: BitCoin is nothing but a ponzi scheme to the central bank tasked with preserving the viability of an entire insolvent continent, and a a currency which unlike BitCoin would never survive absent regulatory intervention.
So while the electronic currency is soaring exponentially as it goes through its appreciation golden age, will the one thing that can finally end the dream of BitCoin holders arrive soon: when the government, and existing monetary authorities, start taking it seriously.
Full Chicago Fed paper on BitCoin
( BitCoin will be targeted and fought - unless it becomes captured by the Banksters and / or their facilitators , because of what it represents ..... )
INVESTING: How global money fraud by the authorities is helping Bitcoin boom
If you finally want reinforced concrete evidence that speed-of-light trading undertaken by Geek-Quants has rendered the entirety of global stock markets a complete fix for the normal investor, then you could do a lot worse than watch this gripping video about a whistle-blowing quant who has finally revealed the bare-assed sociopathy of mendacious Wall Street mendacity.
The Slog first posted about this three years ago, and before that fingered the dark liquidity pools they use as glorified cess pits.
But until now, the reality that we can’t trust any of bankers central or otherwise seems to have passed the head of the Federal Reserve Bank of New York by. Only last Thursday did he come out and claim that some of America’s largest financial institutions appear to lack respect for the law.
William Dudley, a top US banking regulator whose NYFRB helps oversee Wall Street banks including JPMorgan Chase and Citigroup, made the comment during a speech focused on the problems posed by banks perceived to be “too big to fail,” and possible solutions to correct them.Dudley suggested that regulators may be stymied by “cultural” issues that have negatively affected the nation’s biggest banks. I am shocked – shocked to hear this.
What, we wonder, are chaps as naive as Mr Dudley to do about central banks then – do they need regulating too?
Hahahahahaha, sorry – silly question. Just how silly is made obvious by a piece at Spiegel online, which reports that the European Central Bank (ECB) has double standards when it comes to the valuation of government bonds on deposit as collateral for loans. Currently, 116 Italian government bonds without coupon interest rate, known as stripped bonds or “strips”, are valued by the ECB and the Italian national central bank with a grade of “A” – although rating agencies actually do not assign that grade. Or indeed, anything near it: large raters like S & P, Moody’s and Fitch already quote a “B” status downgrade for the Boot financial system.
By assigning an “A” rating, the ECB is knowingly favouring those banks that submit such papers as collateral when they borrow money from the central bank…..especially Italian financial institutions. Oddly enough, Mario Draghi is neither German nor Greek, but Italian. And he chooses to use a minute shop called DBRS – which is one of the few ratings agencies still rating Italy A – to ‘justify’ his crime.
Except that, um, When Spiegel told DBRS about it, they said “that’s not correct” (aka fraud) because even they don’t gave that rating to strips.
Anyway, your savings income has been raped by Zirp, your bank has fiddled you on Libor, Sovereigns have put pins in your bear-note balloons with QE….and now the euro’s central bank has moved on from defrauding bondholders and stealing from bank customers to fiddling debt investors.
I wonder why anyone is surprised that Bitcoin is growing like topsy, evading as it does this global nest of depraved vipers? If you still are, then read Liam Halligan’s Torygraph column today. I still have that nasty feeling that – like Pirate Radio 50 years ago – the system will be declared a mortal sin before too long, and hugely criminalised. But in the meantime, it may well represent at least the near future.
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