Bitcoin is now trading under $300.00. The low today so far is $282.47. (The high today was $360,54). This downside volatility suggests very aggressive selling.
As I have posted some time ago, I expect a major new round of U.S. government arrests of people involved with Bitcoin. The arrests may, or may not, be justified from a libertarian perspective, but the lesson learned is that not only is Bitcoin a dangerous investment but using Bitcoin will not protect you from federal investigations and prosecutions.
The promotion of Bitcoin by members of the libertarian community as the libertarian solution to government money was a tragic error. It was a combination of poor understanding of monetary theory, poor understanding of the nature of investments and an absurd belief that "the math" behind Bitcoin somehow proved that it required worship even beyond worship of Aqua Buddha.
-RW
>I expect a major new round of U.S. government arrests of people involved with Bitcoin. The arrests may, or may not, be justified from a libertarian perspective, but the lesson learned is that not only is Bitcoin a dangerous investment but using Bitcoin will not protect you from federal investigations and prosecutions.
ReplyDeleteThis item from a Forbes commentary on Oct. 3, 2014 by Josh Ungerman is interesting: "What would a potential tax evader who is too young to have hidden money offshore think he can gain by using the cyber currency Bitcoin? The answer is simple, the same protections promised by so many tax shelter promoters from good old-fashioned barter tax shelters to offshore tax havens. Namely, secrecy and an obtuse trail of funds.
Unfortunately for would-be tax cheats, IRS Criminal Investigation has committed a team of IRS Special Agents to master Bitcoin and other virtual currencies. The IRS knows that to use Bitcoins, one needs a virtual wallet along with private keys and public addresses. Unknown to many Bitcoin users is the fact that every Bitcoin transaction is included in a ledger called a block chain.
The IRS is simply accessing the block chain to review all Bitcoin transactions. From that point, the IRS works its way back to the public address that was used in the Bitcoin transaction. While the public address itself does not identify the user, the IRS has been very clever in associating the public address with the identity of the Bitcoin user. Thus, Bitcoin and other cyber or crypto currencies do not provide the level of complete anonymity many have ascribed to crypto currencies."