Float: Bitcoin’s little Problem


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A cashless society, a true alternative money, an asset backed currency as opposed to fiat money. That and other hopes filled the jackpot expectations of many. But what is the true value of a crypto currency from a fundamental point of view. Yes, blockchain technology is useful, an elegant solution to securely verify a transaction on decentralized ledgers.
So, using Bitcoin as an example, does it really matter if Bitcoin is traded at $0.1 or $1000’000? Does that momentary perception of market capitalization bear any real meaning? Let’s ask the question differently; what was Bitcoin made for? One might argue it was created to be a currency, indeed to purchase goods and services, to sell goods and services. Is that really taking place? Fact is that it’s real free trading ‘float’, the actual amount of bitcoin that is truly performing it’s function as a currency, is almost insignificant. Most of Bitcoin is locked and bolted in investor wallets. So even the amount available to investors, the amount that is actively traded is formidably thin. This very limited supply in circulation, the limited active float is the basis for this dramatic volatility over the last months.



Going back to the initial statement, does it really matter what Bitcoin is traded at? Not really, what really matters is if Bitcoin is fulfilling it’s true function, namely that of a currency. So far, that part is negligible.
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BLOCKBUSTING YEAR 2O18

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As I woke up this morning, enjoying my favorite first coffee, Brooke chanted out my usual financial summary I have now become accustomed to. Nothing special nowadays. She beamed up the key figures right in front of me over the kitchen table, all my accounts, my two portfolios, all non-financial assets with derived appraisals on my real estate, my home and holiday appartment, the latest  estimates on my stamp collection, even one on my old books collectables. Nothing had moved significantly lately so Brooke was fairly calm.


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All I want for Christmas is a Bitcoin

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They say you know there’s a bubble when the man on the street gives you a stock tip. It’s one of those moments when your friends ask, your relatives ask, even your mother asks “How can I double my money”.

It becomes such a repugnant question to answer that the easy way out, even for an investment professional, is to just follow the bandwagon. At these moments in time, the market appears to soar to the highest heights of irrational exuberance. There is no way out, especially if your job is to invest for a living.



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Bitcoin could do to banks what e-mail has done to our postal service

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We accepted their jammed keys, their snarled ribbons and their smudgy carbon paper for copies. It was our world, but we knew no better. Fortunately the PC arrived in this absence of logic and our lives changed forever.



Sometimes you need to look afresh at what we take for granted in order to innovate, like how we do banking. Here, bitcoin or more specifically blockchain could do to banks what email has done to our postal service. Perhaps it’s a little before its time, like the Internet before the web browser. But it’s surely not a hype?

Article by James Eagle