I am pleased to announce the relocation of the Boring Bitcoin Report. Previously viewed on Forbes.com the report will now be available here, on BoringBitcoinReport.com.
The BBR has been incredibly well received by the Bitcoin community allowing for a stand-alone website exclusively focused on bitcoin reports.
Boring & Company is working on building up the website to allow for added features, including direct communication channels. Our focus will continue to be catered towards Bitcoin news most relevant for investing, including government initiative updates.
Here’s another not-so-boring week in review:
Government Bitcoin Initiatives:
Last week I predicted that the price of bitcoin would decrease due to the US Marshal’s Bitcoin Auction. When the government announced the details of this auction the week before, the price began to decline.
My prediction was based on conversations with numerous bitcoin investors and auction participants. The general consensus was that enough bids would be placed under market value for this widely watched auction that it would move the market. However, this was not the case. In fact, the market price of bitcoin increased about 1.8 percent this week. Bitcoin proved to be resilient through the week, a celebrated accomplishment!
US Marshal’s Bitcoin Auction:
Today we are anxiously awaiting the results of the bitcoin auction. The US Marshal’s office will release the winners anytime now.
Results of our US Marshals bitcoin syndicate: Bidders – 42 Bids received – 186 BTC quantity bid – 48,013 Winners notifed by USMS on Mon
— Barry Silbert (@barrysilbert) June 28, 2014
GAO Releases Bitcoin Report Looping CFPB In
United States Government Accountability Office released a report on the emerging regulatory, law enforcement, and consumer protection challenges as requested by Sen. Tom Carper, Chairman of the Committee on Homeland Security and Governmental Affairs.
The GAO found that the multiple government agencies looking to regulate Bitcoin will need to streamline efforts, and interagency collaboration would be necessary to mitigate the risk of Bitcoin.
The GAO has tasked the Consumer Financial Protection Bureau with identifying interagency working groups and overseeing the collaboration process. The CFPB was the agency born out of the Dodd-Frank financial reform act, with jurisdiction under the Federal Reserve and essentially has a blank check budget. Bitcoin does have one saving grace with the CFPB, Former CFPB Deputy Director Raj Date currently sits on the board of Circle.
California Legalizes Bitcoin
Assembly Bill 129 repealed an archaic law that effectively made it illegal to use any other alternative currency besides US legal tender as money, which would include community currencies, reward points or digital currencies, such as Amazon Coins and Starbucks Stars.
The bill was introduced on January 15, 2014 by Assemblymember Roger Dickinson (D-Sacramento) and Gov. Jerry Brown signed it into law on June 28.
“This bill is intended to fine-tune current law to address Californians’ payment habits in the mobile and digital fields.” said Dickinson in a press release.
11 Assembly members voted no on this bill:
Frank Bigelow (R- 5th District), Joan Buchanan (D – 16th District), Steve Fox (D – 36th District), Adam Gray (D – 21st District), Shannon Grove (R – 34th District), Diane Harkey (R – 73rd District), Brian Maienschein (R – 77nd District), Jim Patterson (R – 23rd District), John A. Pérez (D – 53rd District), Sharon Quirk-Silva (D – 65th District), Marie Waldron (R – 75th District)
California is also one of the top spots for Bitcoin startups with over $90 million in venture capital out of a global amount of $216 million.
The OECD’s Positive Take On Bitcoin
The Organization for Economic Co-operation and Development published a rather positive paper on bitcoin titled, The Bitcoin Question: Currency versus Trust-less Transfer Technology.
The paper outlines how the effects of the 2008 financial crisis caused distrust in the financial system and was essentially the catalyst for new digital technologies, such as Bitcoin. Further, an added benefit of Bitcoin is the blockchain, which removes the need for trusted third parties.
The OECD does not believe, however, that Bitcoin will become an alternative to legal tender and that if Bitcoin adoption begins to undermine the financial system, governments will probably take action.
Swiss’ Federal Council Issues Report On Virtual Currencies
This report is in response to postulate Schwaab, which asked the federal Council to report on the risks of virtual currencies such as Bitcoin.
The Council concluded that risks such as anonymity features could present an opportunity for illegal acts. Bitcoin could be used to acquire illegal goods, launder money, and can be stolen with relatively little reparations. This boilerplate report provided little difference between the risk of using bitcoin, fiat currencies, or other digital currencies. Such reports can stifle innovation.
The report did note that “Bitcoin is a ground-breaking innovation that can enable consumers to escape from the dependency of the financial system and revolutionize payment transactions.”
Bitcoin’s Success in Argentina
Argentine businesses are benefiting from accepting bitcoin because they get paid in a more accurate exchange rate as opposed to the government’s fixed rate of 8.15 pesos per dollar. The Argentine peso is undergoing volatility and hyperinflation; the black market exchange rate is closer to 12 percent. Bitcoin is liberating Argentinean business from the country’s strict currency controls.
Buenos Aires is becoming a hotspot for Bitcoin. It hosts the world’s largest Bitcoin meet-up and is now home to payment processor, BitPay.
Temasek Launches New York Office and Bitcoin Experiment
Temasek Holdings is an investment company owned by the Singapore government with a portfolio value of S$215bil ($171bil USD) in 2013. On Thursday, Temasek opened up shop in New York City to cultivate relationships on Wall Street. Prime Minister Lee Hsien told guests at the opening party that a significant amount of Temasek’s portfolio consist of US investments.
Temasek chairman Lim Boon Heng also gave a speech where he divulged that Temasek held a company-wide Bitcoin experiment, where all employees from the top down had to donate bitcoin to a charity operating a bitcoin wallet. While, Temasek does not currently hold any Bitcoin related investments, Mr. Lim said “Temasek … has its eye on the opportunities of tomorrow’s digital world”.
Bitcoin Industry Analysis:
Winklevoss Bitcoin Trust Takes One Pending Step Forward
The Winklevoss Bitcoin Trust (WBT) is now on Bloomberg “Pending Listing” which might mean the Winklevoss Bitcoin Trust could be listed on the NASDAQ as soon as this year. In May the news came out that the twins had chosen the NASDAQ to list their Bitcoin ETF, but earlier this year the prospects didn’t look so good, after the Mt. Gox debacle.
“Winklevoss Bitcoin Trust is an investment company. The Company provides investment participation in the Bitcoins market through investment in securities.”
The WBT and SecondMarket’s Bitcoin Investment Trust (BIT) are in a procedural race to become the first publically traded Bitcoin ETF. The WBT took the more traditional route, requesting approval through the SEC. However, this process could take years. Barry Silbert’s BIT is not asking for SEC approval, rather going through procedural motions at FINRA, he expects to be in business by Q4 2014.
NASDAQ and Andreessen Race to Launch NY’s First Regulated Bitcoin Exchange
While Barry Silbert and the Winklevi race to introduce the first publically traded Bitcoin ETF, the NY Post reports that Marc Andreessen and NASDAQ might soon be in a race to launch New York’s first regulated Bitcoin exchange.
“Andreessen, whose venture capital firm was an early investor in tech darlings like Twitter, has reached out to the New York Department of Financial Services about the upcoming rules and what it would take to create an exchange, sources said.”
Western Union Appears Not To Have A Bitcoin Strategy
This week Bloomberg’s Trish Regan interviewed Western Union CEO Hikmet Ersek and asked him about new competitive transaction methods like Bitcoin. Ersek began speaking very fast and said his company was innovating with new technology and the company would use Bitcoin if it were regulated like a currency. However, under FinCEN, the US Treasury department overseeing money transmitters, bitcoin is treated as a currency and regulated.
Ersek later went on to say that “it’s not easy to move money across borders.” Apparently he has not spent much time looking at bitcoin as a remitter, because that is simply not the case.
Just like that. Sent $5 from Ghana to @Mbwana in Tanzania. Thanks to bitcoin, it arrived in 3 seconds. Didn’t pay a 25% fee to no bank.
— Mawueli Kofi Adzoe (@mawueli) June 15, 2014
Singaporean Exchange itbit Now On Bloomberg Terminals
Joining the Winkdex, Kraken, CoinBase, and BitStamp.
Quickbooks Online Now Accepting Bitcoin
Coinbase and QuickBooks Online partnered up to offer PayByCoin by Intuit Labs for small businesses who use QuickBooks to accept bitcoin payments. The simple add-on costs a one percent payment processing fee. Merchants can elect to have bitcoins converted to government currencies or keep bitcoins in their accounts.
624,000 small businesses use Quickbooks online, and last year Intuit processed over 40 billion in transactions.
Jersey Island, UK Trying to Become the Bitcoin Isle
The small island between France and Great Britain is trying to become the next Bitcoin Isle. The island has a population of about 100,000 people and 43 percent of its economy comes from the financial services industry, a perfect fit for a Bitcoin hotspot.
Robbie Andrews, of bit.coin.je, an industry body that promotes the use of bitcoin said “At the moment there is a big push for a digital industry in Jersey to grow, and if you asked any technologist what is the one technology that fits between technology and finance, it would be a crypto-currency like Bitcoin.”
Daniel Masters is hoping to launch the Global Advisor Bitcoin Investment Fund Limited in Jersey in July 2014.