Bitcoin and other Intangible Savings Vehicles

17 Feb

Bitcoins are always portrayed as tangible "coins" rather than intangible, digital "bits" [courtesy Google Images]

Bitcoins are always portrayed as tangible “coins” rather than intangible, digital “bits”
[courtesy Google Images]

Reuters reported in “Bitcoin plunges after marketplace indefinitely halts withdrawals,” that,

“The price of the digital currency bitcoin slid to its lowest level in nearly two months on Monday after bitcoin digital marketplace Mt. Gox said a halt on withdrawals it announced on Friday would continue indefinitely after it detected “unusual activity.”

“The bitcoin price varied dramatically from one exchange to another, with Tokyo-based Mt. Gox, the best known operator of a bitcoin digital marketplace, recording one of the biggest drops for the day.

“On the Mt. Gox platform the currency plunged to as low as $500 early on Monday, down more than 27 percent from Friday’s final price of $692, according to the Mt. Gox website. It last traded at $595.74, off nearly 14 percent from Friday.”


What’s the “halt on withdrawals [can] continue indefinitely” mean?

It means that the Bitcoin market is manipulated and not a true, free-market currency.

The reason for the halt on withdrawals was said to be “unusual activity”.

What do you suppose “unusual activity” means?

It might mean that the Mt. Gox exchange is heavily invested in Bitcoins, and the free market—or hackers or government—are pushing the price of Bitcoins down, so the Mt. Gox exchange is endeavoring to protect its investment in Bitcoins by refusing to allow withdrawals by people who are bailing out of Bitcoins.

If so, I’ll bet that the Mt. Gox Bitcoin exchange’s “halt on withdrawals” will continue until Mt. Gox has managed to secretly liquidate most of the Bitcoins it currently owns and thereby protect its own wealth.  Then, when the management of Mt. Gox is safe from further Bitcoin losses, it will allow its “depositors” to withdraw and sell their Bitcoins for whatever they can get.

Lesson #1:  Those who live by the digital currency, die by the digital currency.

Lesson #2:  Those who invest their savings in something tangible like gold will be comparatively safe from being robbed by “hackers and bankers and bureaucrats”  (Ohh, my!).


Posted by on February 17, 2014 in Fiat Currency, Fictions, Money, Savings, Values


Tags: , , ,

7 responses to “Bitcoin and other Intangible Savings Vehicles

  1. Peter

    February 17, 2014 at 12:21 PM

    The red flag was evident starting in October of A.D. 2013 when it went from 100 to 1200 in a matter of roughly 10 weeks, this is what is called a parabolic spike. Parabolic spikes usually end badly for those (uninformed) entering the market at the “top”. Speculative parabolas generally correct all the way back to the original pivot point, I suspect we will see this fancy idea go back to 100, as in very soon.

  2. Peter

    February 17, 2014 at 12:30 PM

    It’s one of those scams you want to get in early on and get out when your supposed to. There are rules governing trading in general. If you know where you are in the trend, the beginning or the end it’s relatively easy not to get hammered. When I began to study Elliott Wave years ago this thing called timing began to make sense.

    The sad thing about bitcoin at this juncture is their may be folks out there that think it’s a good time to get back in at current levels.

  3. thomas russo

    February 17, 2014 at 3:51 PM

    Its a tokin, get real by the way fed notes are script

    • J.M.

      February 18, 2014 at 12:25 PM

      @ Its a tokin

      You’re jokin

      @”………fed notes are script.

      or scrip?

      • thomas russo

        February 18, 2014 at 1:09 PM

        Ever play monopoly?, all the money (scrip) is put into play and each receives a token play peace (social security number/name), when the game is over there is one winner and no one can buy or sell not even the winner, game over.

  4. J.M.

    February 18, 2014 at 2:23 PM

    @ > a token play peace
    Piece to U 2

  5. Roger

    February 25, 2014 at 4:08 AM

    that Mt. Gox is on the rocks… their CEO resigned from the Bitcoin Foundation… they deleted all their tweets from twitter… now their website is offline…


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