OP-ED: BTC Trading Analysis, Regulation & Altcoin Legitmacy

By August 5, 2014Bitcoin Business
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Near-Term Trading

As a part time trader with a strong track record of success, I have applied the skills I have attained from trading multi asset options and other volatile instruments to the Bitcoin market with very positive results. I tend to use news flow, volatility projections, fundamental, economic, and technical analysis with varying priorities to gauge which ways markets will go and how far.

This method proved to be very successful last May as I originally made my entrance into Bitcoin with a basis in the low $400’s. I now see a similar inflection point coming into play – while there are many concerns with the NY state regulation submission that was drafted within the last couple of weeks, and which appears to be resulting in near term consolidation; I see this as an excellent buying opportunity as spot prices trend lower. However, I am entering the market again slowly as I await positive catalysts, signals, and indicators. Let me elaborate on my view of the regulatory environment:


The disappointingly unproductive NY regulatory draft would clearly constrain the industry, and is in my opinion a direct result of this particular regulator being in the pocket of certain “Too Big to Fail” financial institutions which just happen to be headquartered in the same state.

But did we really expect the banks to just roll over and let Bitcoin undercut them in many facets of foreign exchange and various other financial markets? Of course not, this battle was clearly expected – Fortunately, not all states are NY.

My view see’s early stage regulation for virtual currency to vary from state to state. While NY came up with a highly combative proposal, California and other states seem to be siding with the Bitcoin community, and appear primed to establish much more permissive policy. Bitcoin regulation could in fact be very similar to recent Cannabis regulation, which is primarily a state to state matter, as the federal government sits back and watches these industries evolve.

Alt-Coin Legitimacy

While there have been hundreds of new alt-currencies introduced since the beginning of this year, the vast majority of them has been pump and dump schemes or other worthless ventures and scams. The coin 2.0 projects including: Ripple, NXT, Ethereum, and a few others, attempt to advance on Bitcoin’s technology by introducing virtual smart contracts and asset exchanges.

- Multitude of currently existing Altcoins, via MapOfCoins.com

While these leaps in technological advancement and efficiency could in time prove to be significant, it seems to be a case of moving too far too quickly – it remains a fact that a large portion of the world is still yet to experience the benefits of transacting with virtual currency – and the ones that have may still be hesitant to moving all of their financial needs into an ecosystem which is both volatile and new. Although, I do commend the innovators responsible for these brilliant ventures and urge them to be patient while the rest of the world catches up.

It remains to be seen what will happen with these currencies and others including many of which simply piggy back off of Bitcoin’s blockchain infrastructure while offering only a few differentiating factors. While I am a supporter of the Blackcoin’s and Zetacoin’s of the world – the virtual currency field is slowly developing into an extremely competitive area, where you either innovate or get left behind.

There could be potential for some coins which attach themselves to particular areas or needs, particularly, Potcoin which is attempting to become the official virtual currency of the booming Cannabis industry, or Darkcoin which promises its users additional levels of security and anonymity. However, the field is vast with losers, and it can be anyone’s guess as to which coins emerge as legitimate contenders to Bitcoin’s crown.

For the factbook – Bitcoin continues to be the largest virtual currency as well as the fastest growing virtual currency in the industry. While I may regret making this invitation: I urge readers to express their thoughts on Bitcoin, as well as other virtual currencies.

About the author

Dov Berns has a background in hospitality and has recently completed my MBA with a focus in Finance and Multi Asset Investment Research. Dov originally became interested in bitcoin from an investment perspective, but has since developed a well rounded view on virtual currency economics, technology, and politics. Dov is currently working on a virtual currency start-up in a business development role.

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