TECH TALK: BILL MAGEE
Dude, where’s my bitcoin? The call is a legitimate one as there are growing fears the cryptocurrency phenomenon is threatening to disappear down a digital rabbit hole.
It follows an alarming rise in crypto asset-related investment scams and ransoms reflected in a Financial Conduct Authority website dedicated to the growing menace.
The virtual currency industry – read bubble – remains unregulated and so doesn’t fall within FCA remit. Not yet.
The Bank of England has joined the fray claiming that no existing cryptocurrency is structured in such a way that it is likely to work as a means of a long-term payment scheme.
The crypto coin may have notched up record levels in virtual value in its 12 years in existence, but the market leader remains highly volatile.
It recently suffered its worst seven days in months dropping below £22,000 for a single unit before rallying to £24,500, still well below a record £30,000 set earlier in January.
More extreme financial fluctuations are expected.
Owners of crypto currency consider themselves fortunate with their nest egg, viewing it as the antithesis of traditional, but staid, financial rules of the market. Breaking all the rules, risk taking – isn’t that what it’s all about? Much more exciting than gold bars or diamonds.
Of course, it’s not quite like that.
For starters bitcoin as an electronic cash machine isn’t, let’s say, tangible. Many folk have poured their hard earned cash into what represents a mere fraction of a bitcoin.
Also, for the uninitiated – and that’s the vast majority of the population – browsing a typical website on the topic in search of clarity is like trudging about in digital treacle.
The bitcoin phenomenon has brought a warning from European Central Bank president Christine Legarde that the cryptocurrency arena had facilitated “funny business”, and the ECB called for greater regulation.
Janet Yellen, the new US Treasury Secretary and an ex-chairman of the Federal Reserve, goes further, describing cryptocurrencies such as bitcoin as a “particular concern”, claiming they’re mainly used for illegal financing and should be curtailed altogether.
However, BlackRock, the world’s largest asset manager with $7.81 trillion under management, is understood to be granting, through a prospectus, at least two of its funds the ability to invest in bitcoin futures.
Add to this 25 top pension fund and endowments players planning to do something crypto, according to an eToro brokerage survey.
JP Morgan, on the other hand, warns bitcoin is a less reliable hedge during periods of acute market stress.
That’s, er, like now.
I still had to blink twice on reading about the IT worker who has been trying for several years to persuade Newport City Council to allow him to dig deep on a local ever-growing landfill site.
Apparently, he put a hard drive out with the rubbish by mistake. Within it was stored 7,500 bitcoin units. Through the passage of crypto-time they’re now worth about £230 million, and he has offered the local authority a reward of £55m to help him find the device.
Yes MILLION. That’d get the bins emptied on time.
It’s a non-starter though as local licensing regulations forbid such casual digging. Just when I was about to arrive on the scene with my virtual JCB. Oh well, onto the next get-quick-rich scheme that must be just around the corner.
Thought so. Here we go.
A really friendly personal email arrives: I’m recognised as being both sincere and compassionate by a really, really nice great-grandmother who offers to deposit in my direction 9.5 million bucks.
“God bless your heart”, she says. I just have to send over my full bank details and security passwords. Also my digital wallet, if I have one, she’s promised to fill to overflowing.
That’ll do nicely. I mean, what could go wrong…
The comments is this column should not be taken as investment advice. Please check with your financial adviser before investing