The US Regulatory Vice Closes on Bitcoin Just six weeks after the US Treasury decided enough-was-enough with this upstart non-fiat, non-controlled-by-TPTB currency (and applied money-laundering reglations), US financial regulators are now looking for supervisory control over Bitcoin. As The FT reports, CFTC's Bart Chilton notes "it's not monopoly money - real people have real risk in these instruments," and that regulating the controversial cyber-currency "is sure something [CFTC] needs to explore." Chilton's remit to regulate this "shadow currency" is predicated on it becoming a basis for derivative contracts as opposed to purely transactional (akin to the monitoring of physical oil transactions that can influence crude futures.) Since the Treasury's March decision, at least three North American companies have had their accounts seized by the banks but while this attempt to control the virtual currency follows the ECB's 'ponzi attack' last year, the 'regulators' may note that, "even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn’t mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency."
But, of course, regulation will destroy bitcoin, so sell all your coins now, because in the end, the Banksters will always win; there is no way to defeat them. That's how it goes, right? Because, you know "if I can't go down to teh gas station, fill up my tank, and pay in BTC, it will never be anything other than a bubble." Right. It couldn't POSSIBLY be a revolutionary new protocol that will have a hand in defeating the evil banksters and putting monetary power back in the hands of the people. It has to be regulated to be accepted!
So, since [ (a) regulation, and (b) throwing government money at a problem to solve it ] drive prices WAY DOWN (hence bear argument that regulation will cause bitcoin to crash and die),
let's look at some examples of markets where throwing government money at / regulating a problem has caused prices to go WAY DOWN. Drugs. Back in the 1950s, they were so much more expensive. A bag of weed cost like $250 and a bag of heroin ran you $2500. Now, you can get both on the street corner for $20 and $10 respectively. Thanks to government regulation of individuals and businesses, as well as throwing money at the problem (law enforcement $$ and school education $$, etc.) drug prices have gone WAY DOWN and hardly anybody uses them, and the same thing will happen to Bitcoin if it is regulated.
College. A great example of how throwing gov't money at something causes prices to go down. College used to be real expensive - in the 50s, a 4-year degree at a good school cost something in the range of $120,000. Now, you can get a degree at a university or a private school for only $20,000, much like in European countries. This is thanks to federally-guaranteed student loans driving DOWN the price of education and now every single poor low-income person in America can afford to go to college.
Almonds. In California, the Almond Board lobbied the legislature to pass regulation requiring all almond growers to purchase $500,000 pasteurization machines. Naturally, this caused all small almond growers to instantly go out of business. Because we live in Bizarro-world, and everything is the opposite of what it seems, the requirement of $500,000 along with reducing competition actually caused almond prices to go WAY DOWN, and so the exact same thing will happen to Bitcoin.
P2P Filesharing This has nothing to do with prices, but rather, adoption. As we all know, once the Government got wind of P2P torrent filesharing, they began regulation and prosecution, going after individuals who downloaded torrents as well as websites who enabled users to download torrents of illegal material. The effect of that now is that absolutely no body in the entire world is able to use BitTorrent software;
in fact, it is absolutely not a widespread practice to hop on the net, find a torrent in 2 seconds, and download a movie illegally, because the government made that impossible due to regulation, and the exact same thing will happen to ButtCon.TL;DR: So, I've given you 3 absolutely IRREFUTABLE examples of how government regulation, interference, and "throwing government money at a problem" always, 100% of the time, causes prices to go WAY DOWN.
Bitcoin is going to CRASH guys, due to regulation; tell me your thoughts and try to convince me not to sell ALL of my coins in the next 24 hours.
