Categories: Bitcoin Politics

Wedbush: Bitstamp Issues Shouldn’t Dampen Confidence in Bitcoin

Click here to view original web page at

Wedbush Securities issued a new report today in which it examines how bitcoin evolved in 2014 and why, despite challenges, it believes the ecosystem will bolster its still nascent infrastructure in 2015.

The 13-page report is the latest from the US financial services and investment firm, which has been among the more outspoken players in the finance industry on the subject of digital currencies.

Though wide-ranging in its analysis of the bitcoin ecosystem, perhaps the most notable comment from Wedbush addressed the ongoing outage at leading US dollar bitcoin exchange Bitstamp, which it argued shouldn't color perception of the industry as a whole.

Authors Gil Luria and Aaron Turner wrote:

“Weakness in unregulated foreign-domiciled third-party providers such as Bitstamp should be viewed as such, not as a weakness in bitcoin or the underlying technology.”

Luria and Turner went on to voice their opinion that the incident underscores the need for bitcoin trading to migrate to “regulated, robust, liquid and secure venues” in 2015.

The comments notably echo sentiments Wedbush expressed at the time it completed its first investment in the bitcoin ecosystem via bitcoin marketplace Buttercoin.

In its public comments, Wedbush lauded Buttercoin as a necessary step in the maturation of the bitcoin market, noting its “reliable trade execution” and established US banking relationship.

However, the lion’s share of the report focused on bitcoin’s accomplishments in 2014, as well as what it sees as a path the technology will travel on in the year ahead.

Bitcoin already ‘quietly mainstream’

In contrast to some observers who it acknowledges try to paint the ecosystem as a niche community, Wedbush argues in its report that bitcoin already went "quietly mainstream" in 2014.

The report stressed the integration of the technology at leading payments companies as evidence of bitcoin’s overall success.

“We believe the integration (not acceptance) of bitcoin by a range of companies from old guard NCR and First Data to Silicon Valley leaders PayPal and Intuit serves as the ultimate validation of the impact of the technology, not to mention the broad positive commentary from other industry participants,” the report reads.

In this light, Wedbush argues that bitcoin has the potential to disrupt legacy financial institutions “over the next few years”.

Price conversation evolves

Another topic the paper discusses is the relationship of the bitcoin payment network to the price of its native currency, and the tendency of observers to correlate the performance of the price with that of the ecosystem.

“We find investors continue to (mistakenly) view the price of the bitcoin currency as a forward indicator for the success and impact of bitcoin blockchain technology,” the authors write.

Wedbush voiced its belief that the technology’s innovation is likely to continue regardless of its price, using analogies to more traditional markets to underscore the point.

"2014 has shown that bitcoin prices are only related to the success of underlying technology as gasoline prices are related to car sales," the report notes.

Instead, Wedbush suggested a more suitable metric for the overall performance of bitcoin could be the adoption of the technology.

For example, it compared the number of merchants enrolled by bitcoin processors BitPay and Coinbase, claiming that they have added more consumers than Apple Pay, the tech giant’s mobile payments app introduced in September.

Use cases to take hold

While much of the ecosystem’s focus will be on developing and improving its infrastructure, Wedbush predicts that bitcoin will begin to disrupt certain areas of commerce in 2015.

More specifically, the report named microtransactions and remittances as areas where it expects bitcoin to gain traction.

Elsewhere, the report concluded, bitcoin’s technology can be expected to continue its slow but steady development:

“We expect 2015 to mostly continue the hard work of building venues, settling regulation, and integrating into the existing financial services environment.”

Image via Shutterstock

The 13-page report is the latest from the US financial services and investment firm, which has been among the more outspoken players in the finance industry on the subject of digital currencies.

Though wide-ranging in its analysis of the bitcoin ecosystem, perhaps the most notable comment […]


Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Published by

Recent Posts

$10K Bitcoin Stronger Than Ever But No One Seems to Care: Google Trends

Risk Disclaimer - By using this web site you agree to its terms and conditions. All materials, including but not… Read More

5 hours ago

Bitcoin Is A Hedge Against Gov’t “Fiscal Irresponsibility”, Analyst

Equities portfolio manager turned crypto fund executive Travis Kling has argued that Bitcoin has come into its own as a… Read More

6 hours ago

Why Are France & Germany Blocking Facebook’s Crypto? The Euro, Apparently

For those most part, governments have ignored Bitcoin . While the crypto asset’s proponents see it as the future of… Read More

6 hours ago

U.S. Charges JPMorgan Suits for ‘Spoofing’ Precious Metals Markets

| Source: Lorimer Images/Shutterstock The United States Department of Justice has charged three gold and precious metals traders from JPMorgan… Read More

6 hours ago

Your Crypto Exchange Can’t Send Even $1000 Without Exposing You

Regulator-compliant crypto exchanges are required to share your information with other financial institutions. | Source: Horth Rasur/Shutterstock Transferring more than… Read More

6 hours ago

Bigger Bloodbath in U.S. Stock Market Likely: Factors of Further Downtrend

Geopolitical risks and an uncooperative Fed could trigger a short-term relapse in stock prices. | Image: Shutterstock The U.S. stock… Read More

6 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More