A Bitcoin for Your Thoughts
Originally posted on Zero Hedge …
The best performing currency year-to-date has no home country, no central banker and no physical scrip; it is the online-only ‘Bitcoin’ and as we noted recently, it is becoming more mainstream. BTC, as the currency is known, up 130% year to date in dollar terms, thanks to rising demand from a wide variety of adherents, which ConvergEx’s Nick Colas notes, includes libertarian activists, small businesses, online drug dealers and gambling sites. That makes the Bitcoin a controversial subject, to be sure, but Nick notes we can also learn from this unique case study a lesson in global economics. Bitcoin ‘Money supply’ growth is capped at a slow rate – far below its current levels of demand. That makes it prone to boom-bust cycles. It also has no sovereign sponsorship, which means it works outside any nation’s security apparatus. Lose your bitcoins to hackers? Tough luck – there is no FDIC in these parts. Still, Colas concludes, in the creation and growth of the Bitcoin it is not hard to see the online future of currency, especially as real-world alternatives continue to struggle with sluggish economies.
Note : The price is $33.56 as of this post.