Bitcoin is 10 years old. But it won't go mainstream until it's regulated

Bitcoin, the world's most famous cryptocurrency, just celebrated its tenth anniversary.The digital cu...

Posted: Jan 14, 2019 9:11 PM
Updated: Jan 14, 2019 9:11 PM

Bitcoin, the world's most famous cryptocurrency, just celebrated its tenth anniversary.

The digital currency has made plenty of strides toward legitimacy since it first launched, but it won't become a mainstream investment without the embrace of the Securities and Exchange Commission.

Bitcoin

Business, economy and trade

Digital currencies

Economy and economic indicators

Money, banknotes and coins

Banking, finance and investments

Financial markets and investing

Government organizations - US

US federal departments and agencies

US government independent agencies

US Securities and Exchange Commission

Derivatives markets

Exchange-traded funds

Funds and investment trusts

Securities trading

Currencies

The SEC has yet to give the green light to any bitcoin projects. The agency has already rejected bitcoin ETF plans from Direxion, ProShares and Tyler and Cameron Winklevoss, the twins who became known for their legal battle with Mark Zuckerberg over the origins of the idea for Facebook.

Bitwise Asset Management filed last week with the SEC for an exchange-traded fund that would track bitcoin's performance. Another company, Wilshire Phoenix Funds, filed to sell shares of a fund that would own a mix of bitcoin, short-term Treasury bills and US dollars.

A decision about another proposed bitcoin ETF from mutual fund firm VanEck has been delayed. Because the shutdown is forcing the SEC to run with limited staff, that issue is not likely to be resolved until the government reopens.

The SEC did not respond to a request for comment.

Matt Hougan, global head of research for Bitwise Asset Management, said he thinks the SEC is just being prudent and won't rush to give the thumbs up to ETFs for an asset class that's still evolving.

He noted the SEC took a similarly cautious approach to gold ETFs several years ago before approving many of them. The Winklevoss twins said in an interview this week that they agree with the SEC's cautious approach and will wait years for it to approve their ETF.

Cryptocurrencies like bitcoin present a lot of reason for caution.

Although the price of a single bitcoin (XBT) was once worth nearly $20,000 in December 2017, the value has fallen more than 80% since then to about $3,650. The currency is often compared unfavorably to the greatest financial panics in history.

"Bitcoin is a speculative asset that's still in its infancy," said John Ryding, an economist and adviser at Moeda, which uses blockchain technology to help small businesses get loans. "It can take quite a while for the market to shake out some of the excess. The good news is that bitcoin's been beaten up but it's still in the game."

Bitcoin optimists like Hougan think the worst is over. And there's evidence of mainstream acceptance.

In 2017, bitcoin futures launched on both the Chicago Board Options Exchange and the Chicago Mercantile Exchange and the mutual fund giant Fidelity also established a trading platform for bitcoin and other cryptocurrencies late last year.

Noted bitcoin bear Jeff Gundlach of DoubleLine Capital sounds positive, too. He recently told investors he thinks bitcoin prices could rally later this year and get back to about $5,000. That's nowhere near the currency's high, but it still is about a 35% gain from current levels. Stable trading could help convince the SEC that the time is right to change its tune.

Others aren't so sure that bitcoin's on the rebound.

"We have not seen the bottom in bitcoin," wrote Marin Katusa, head of Katusa Research in a recent report. "The dot-com bubble of the late '90s played out exactly the same way. Hundreds of companies rode the soaring wave of investor sentiment in order to cash in on the hysteria. Hysteria can only support valuations for so long, and eventually fundamentals take over."

Hysteria often gives way to fear as well. The dramatic drop might have scared off some investors forever.

Hougan conceded that there needs to be a big shakeout in the cryptocurrency market for bitcoin to rebound. There are simply too many digital coins out there, and bitcoin still has the dominant market share.

"Most cryptocurrencies are garbage and will be discarded into the dustbin of history," Hougan said. "The sooner the better."

Huntsville
Clear
72° wxIcon
Hi: 88° Lo: 66°
Feels Like: 72°
Florence
Few Clouds
70° wxIcon
Hi: 81° Lo: 67°
Feels Like: 70°
Fayetteville
Clear
69° wxIcon
Hi: 83° Lo: 64°
Feels Like: 69°
Decatur
Few Clouds
70° wxIcon
Hi: 86° Lo: 64°
Feels Like: 70°
Scottsboro
Overcast
72° wxIcon
Hi: 89° Lo: 68°
Feels Like: 72°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 90890

Reported Deaths: 1611
CountyConfirmedDeaths
Jefferson11859225
Mobile9086191
Montgomery6249143
Madison501425
Tuscaloosa397463
Baldwin321023
Shelby305032
Marshall296630
Unassigned273453
Lee250540
Morgan222315
Etowah193026
DeKalb170113
Elmore160237
Calhoun15609
Walker147063
Houston131912
Dallas128823
Russell12331
St. Clair121712
Franklin119620
Limestone119613
Cullman114111
Colbert109312
Lauderdale107112
Autauga102420
Escambia97915
Talladega91813
Jackson8283
Chambers82138
Tallapoosa81478
Dale78520
Butler75235
Blount7363
Chilton7106
Coffee7095
Covington70920
Pike6607
Barbour5635
Lowndes55224
Marion54224
Marengo52014
Clarke4869
Hale45926
Bullock43811
Perry4294
Winston42911
Wilcox4059
Monroe3914
Randolph38810
Bibb3743
Conecuh37310
Pickens3679
Sumter36118
Lawrence3100
Washington31011
Macon30913
Crenshaw2863
Choctaw27412
Henry2453
Cherokee2427
Greene24211
Geneva2320
Clay2175
Lamar1982
Fayette1745
Cleburne1211
Coosa922
Out of AL00

Tennessee Coronavirus Cases

Confirmed Cases: 110636

Reported Deaths: 1092
CountyConfirmedDeaths
Shelby21492288
Davidson19400202
Rutherford607253
Hamilton566147
Knox403236
Williamson326922
Sumner317870
Unassigned29544
Out of TN278314
Wilson207221
Montgomery173411
Bradley171310
Sevier17135
Trousdale15726
Putnam154413
Robertson145017
Hamblen122913
Blount11207
Tipton11069
Maury10815
Washington10662
Madison91213
Bedford87110
Macon83213
Sullivan8069
Hardeman80111
Lake7490
Bledsoe6721
Loudon6533
Fayette6208
Anderson6075
Dickson5951
Gibson5672
Dyer5557
Cheatham5485
Rhea5021
Jefferson4962
McMinn48920
Lawrence4786
Obion4354
Henderson4310
Carter4275
Lauderdale4236
Coffee4172
Warren4034
Hardin4017
Cocke4001
Cumberland3796
Haywood3745
Greene3715
Monroe3669
Roane3642
Smith3633
Hawkins3624
Giles3519
McNairy3165
DeKalb3051
Franklin2864
Weakley2763
Marshall2652
Lincoln2541
Hickman2310
Carroll2283
Crockett2263
Claiborne2210
Henry2160
Wayne2161
Campbell2131
Marion2054
White1943
Chester1932
Johnson1720
Grainger1690
Polk1651
Decatur1612
Unicoi1380
Overton1341
Union1200
Cannon1180
Jackson1061
Humphreys1053
Scott1040
Grundy1012
Meigs980
Benton971
Sequatchie940
Morgan821
Hancock761
Fentress740
Perry740
Stewart700
Clay610
Lewis561
Houston550
Moore450
Van Buren330
Pickett221

Community Events