This is moot point if US clients are involved (IMO, not legal advice): https://bitcointalk.org/index.php?topic=155563.msg1652737#msg1652737MSB/MT registration, as annoying as it is, is by no means insurmountable. On the contrary, it looks to be fairly easy. The AML requirements are NOT a big deal. If it's the same AML requirements that investment funds and brokerages must complete, one simply takes a yearly online test (fill in the blank, not really a test at all). Record keeping is not daunting.....it all sounds much more ominous than it is. I say this without having direct experience with MSB/MT regulations. I do know a little about the fund world, though. MSBs may have a slightly different set of requirements.... |
|
|
|
FinCEN just gives advice  And the advice is directed toward the American government. So nothing is happening yet, and nothing should be affected outside of the US. But your own govs will have their own opinions about it, at some time or another. I believe the US thinks it has reach regarding MSBs & MTs and their interactions with US customers regardless of where the MSB/MT is located, but I admit I have not thoroughly read through all of the advisories: http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.htmlThe US has basically outsourced banking & tax compliance to all other countries and entities throughout the world. This is why foreign banks and brokerages have been turning away American clients recently -- it isn't worth the hassle, due diligence, compliance, and potential liability. The following sentences from this FinCEN advisory sums up the government's view -- "FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of the person's physical location." "Foreign-located MSBs are subject to the same civil and criminal penalties for violations of the BSA and its implementing regulations as MSBs with a physical presence in the United States." "....Relevant factors include whether the foreign-located person, whether or not on a regular basis or as an organized or licensed business concern, is providing services to customers located in the United States." |
|
|
|
|
And as far as professional money getting involved in this, I would be looking for lone day traders at Goldman Sachs et. al. to be getting involved in speculation before large funds pour money into this market. The funds are savvy and realize that the market cap of BTC could not handle large capital inflows.....they are smart money, and doubtful they would want to ride a wave of speculation without getting in at the bottom floor.
VCs have meetings all the time regarding new technology. That does not mean that directly after the meeting, they will pour huge $$ directly into BTC. These meetings serve to enlighten them on the technology so they can invest in other BTC start-ups. There are some smaller shops that shoot for the moon who may get interested, but you will not have groups like Sequoia Capital investing directly into BTC. They would be investing in a BTC start-up......
|
|
|
|
While BTCINVESTOR is absolutely right that bitcoin is not stock, the way the market plays out with periods of panic buying and selling could still apply. I'm as much as, or almost as much as a bull as BTCINVESTOR but I know the bears will come out to play from time to time. This is not something to be feared, it is an opportunity to be revered.  Bitcoin. Exactly. One can't stay parabolic forever. At some point, there will be a correction (very normal).....but IMO there is more room to run for the time being ($150+). A lot of the new money coming into this.....Probably a mix of hot-money (with little tech savvy) and perhaps high-risk fund money, as others have insinuated. In the fund management world, I assure you that only very high-risk money (small %'s of VC type funds) will be flowing into this......your typical hedge fund will not be investing in this in the near future. I seriously doubt event-driven funds even know what BTC is, and 95% of private equity is way way too conservative to invest directly into BTC. VCs will be much more interested in investing in start-ups associated with BTC. And we are farther from BTC as an 'everyman system' than everyone is thinking. Sorry for the double-negative, but there can't not be over-exuberance with BTC. The potential is too big for people not to get too too excited in the short-term. This rise, which will likely continue, will end up pricing perfection. Nothing is perfect or guaranteed. But hey, If the network effect can give FB a $100B market cap, perhaps the network effect can give BTC something similar......I am a believer, but a realist in that nothing goes up forever and some point we will get way way over-extended (where, who knows?). That's just the nature of the game..... |
|
|
|
|
These cycles are part of the inherent flaws of capitalism; nothing is immune. The thing that will unmask this temporary over-exuberance, if that is indeed what is going on, is the fact that Bitcoin will take much longer for the consumer to adopt than everyone is anticipating. With such a small market cap, the new merchants that are accepting BTC won't see much additional business. Can it exist only as primarily a speculatory alternative asset if it is not being widely used for its primary purpose? If so, for how long.....
Because BTC is a longer term play, it will probably be subject to several of these up-down cycles (probably doubtful to get washed out like after the first cycle, barring the unforeseen). It's so unique in that it has characteristics of so many different types of assets. It's part tech stock (an incredible tech story), part currency, part commodity....it's even like a piece of fine art in the sense that the technology can be perfectly copied and replicated (LTC, PPC, etc) but only the original holds high value.
The network effect and popularity are ultimately giving BTC this value.....it has brand appeal, which is also quite interesting. A rose by any other name....
|
|
|
|
Demand is increasing rapidly.. hash rate is increasing rapidly.. and yet the market cap is still relatively small, and a very, very small percentage of the population is in the game. I would not call the current valuation a "bubble" at all.
If BTC were a public company, most people wouldn't even consider investing. That's because a $600M market cap is miniscule in size, and would be likely to offer substantial risk. Of course this type of comparison isn't totally fair, since BTC is much more than just something to invest in -- it is a currency with unique and highly-desirable properties. There will certainly be some corrections along the way, but I do think the chances of a massive sell-off down to single digits is just out of the question (barring some unforeseen catastrophe). Could we see $30s or $40s again? Absolutely. There will be volatility. However, long-term prospects look very rosey, indeed.
I agree. However, there are many good small cap stocks that have sub $600MM market caps. People are buying into the potential of "a currency with unique and highly-desirable properties"; it has not yet been widely adopted so it has not yet become a useable currency for most people. I think merchants will adopt it much more quickly than consumers because BTC is becoming du jour. If BTC achieves what it is designed to achieve, the long-term outlook is beyond amazing.....it's unprecedented. |
|
|
|
|
The core of what gives BTC value is the network effect and popularity. The technological model can be replicated. There are other virtual currencies whose benefits are identical. But the network effect is ultimately what makes BTC the Coca-Cola of virtual currencies. Just like anything else, if everyone believes there is worth -- there is worth. In that sense, BTC is similar to a piece of fine art. It can be perfectly replicated, but only everyones belief in the real thing gives the real thing a much higher value. I guess LTC is the Pepsi to BTC's Coca-Cola......what is Fanta? PPCoin? At any rate, I believe there is value in LTC as progenitor.
The idea of BTC as an alternative asset (speculation) and consumer adoption are the main threads that will bring success to BTC by way of network effect.
I completely agree with your scenario. Hype Cycles are natural to any new technology and will be caused by speculation centered on how fast consumer adoption takes place. Consumer adoption will not happen as quickly as everyone hopes, leading to a correction - and the cycle repeats. The underlying brilliance of BTC, however, and the position it enjoys will leave it higher after the next correction than the last one. BTC still has quite a ways to go before a sell-off IMO; too many new potential buyers just now learning about BTC.
|
|
|
|
When will there be a realistic competitor here.
Having one DECENT exchange is bad for business, I thought normal currency markets took a big slice ..
Yeah, that' s the question. After Mt.Gox transfering its business on US (overregulated) soil, there are quite good opportunities for some offshore (mean out of the western world economy) exchange. It' s hard to compete and start against the most liquid exchanger, but someone has to do it sooner or later. Yes, but if MSB & MT regulations are anything like fund regulations or banking laws, the US government has reach if transactions involved US citizens regardless of where the exchange is located. This is why foreign banks and brokerages are starting to turn away Americans - the due diligence, compliance, and potential for fines is not even worth their time. The IRS has exported compliance to all countries throughout the world. For instance, offshore funds do not accept US clients (exception for institutional clients, IRAs, etc.) due to regulations and taxation issues. Offshore funds always create US based feeders for American clients. And foreign brokerages have the same reporting requirements for US citizens no matter where they are located or on what the exchange the client is investing. I believe the US thinks it has reach regarding MSBs & MTs, but I admit I have not thoroughly read through the advisories: http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.html |
|
|
|
|
My two cents, take with grain of salt -- I do not see anything on the horizon that could burst this bubble (if it is a bubble) anytime soon. There are too many people still getting introduced to BTC for new buyers to dry up. It would take a seriously detrimental piece of bad news to crash BTC and the good news will continue.
My take is that this run-up is part of a second Hype Cycle. At some point we will sell-off ($100, $200, ??). One key to BTC success is Joe Consumer. Joe Consumer, for the most part, has no need for BTC. The market is pricing in a great deal of future acceptance - so much that it will certainly be letdown when Joe Consumer doesn't widely adopt BTC as quickly as many would have hoped. Speculation will succumb to correction. If/when BTC does come back down it will still be higher than the lows of the past because there is an underlying magic to the genius concept of BTC.
And then this cycle will likely repeat at a higher level, perhaps. Unless, of course, the idea of BTC as an alternative asset never quites catches on completely. Really, BTC has two threads of success -- consumer adoption and the potential as an alternative asset -- and they feed on each other.
These hype cycles are normal for groundbreaking technologies. The solar industry ebbed and flowed over decades in a similar fashion. Full adoption was always right around the corner. Things always take longer to gel and there is almost always letdown in the meantime.
To believe in BTC, one has to value the network effect and popularity that makes BTC tradable as a virtual commodity/currency. Yes, BTC provides other benefits but those benefits can be found in other virtual commodity/currencies (LTC, PPC, etc.). It is this network effect that makes BTC the Coca-Cola of virtual currency. IMO there is value in this.....the only reason gold has value is because we all believe it does.
|
|
|
|
|
Show Posts
