Bitcoin

Think the great BitCoin drama is over? After plunging by over 60% intraday, touching $100 from an all time high of $265 earlier, BitCoin was just getting started, posting a just as epic rebound to $200 in mere hours... before tumbling once more to $125... before rebounding again to $180... before sliding to $140... and so on. As the vomit-inducing sequence above hints, merely following every twist and turn of the real time tragicomedy that is the minute chart of BTC is a full-time job. And with the bulk of assorted BTC price charts DDoSed into oblivion, or merely down due to record traffic, the only remaining real-time chart may be the following from Clark Moody: we suggest using 1 Minute resolution. Perhaps what is most fascinating, is that unlike regular stock, FX or commodity charts which are largely dominated by robots, algos and other electronic traders, the trading in BTC is purely carbon-form based. So for those who enjoy some seriously hypnotic after hours undulations, this chart's for you.

Virtual currencies are not the only ones having a bad day, at least in USD-denominated terms (which for all those bullish BitCoin, or Gold, or Silver the fiat-alternative currency, not the asset, should make all the difference in the world - alas most people still don't grasp the difference). Another entity that has seen better times is the terrifying accident-magnet also known Carnival Cruises. Following what seemed an endless barrage of TV crews scouring Carnival cruise ships, bringing a new definition to the term "poop deck", the inevitable has finally happened: CCL has been forced to admit that absent changing something very drastically, it is doomed. And since it can't or won't afford to spend billions on CapEx to actually repair and modernize its assets (like virtually every other S&P500 company), it has done the only thing it can: crush prices, and pray to make up for this in volume and impulse purchases what it is about to lose in cruise revenues. As Bloomberg reports, in order to "entice" customers to come back to the good life, Carnival is now offering a cruise at the low, low price of $38 a night, or less than a stay at a Motel 8.

Treasury yields finally got back up to pre-Payrolls levels today but there was no stopping stocks as the S&P 500 finally broke its all-time highs (and yay verily there was much rejoicing).USDJPY pushed on lower (despite a decent spike on early comments from Kuroda that 'the market misunderstood') edging ever closer to the magic 100 level. This JPY-cross weakness provided the ammo (along with a 5-6bps decompression in bond yields) to take stocks on to new highs (from Friday's close, JPY is down 2.28% vs the USD and AUD up 1.5%) Gold and Silver had a tough day, giving back yesterday's gains. The only stock index to lose today was the S&P Small Caps but Materials and Homebuilders lagged the market. Equities topped around the European close and from then channeled sideways (with a little 330pm ramp effort) but credit markets and VIX were not buying into this move at all. As the Nasdaq had it best day of the year, so Bitcoin, umm, didn't - losing over 50% of its highs intraday. Trannies are the best off the post-NFP gap-down-open, up an impressively ridiculous 4.7%.

In a day full of stunners, we next get news from Cyprus, where a few weeks after the start of the "investigation" into who pulled their cash out of the country's doomed banking system in advance of the confiscation news on March 16 (and where even the current president was implicated in transferring over €20 milion in family money to London) the parliamentary committee tasked with tracking down the leaks, has suspended its probe. As it turns out, it was "all the central bank's fault", which was charged with providing the data. The head of the Cypriot parliament's ethics committee, which was due to look into a list detailing transfers of more than 100,000 euros from the two major banks - Bank of Cyprus and Cyprus Popular Bank - said on Tuesday that the list fell short of what he had requested. "It was with great disappointment and anger that, when we opened the envelope, we realized it contained data for only 15 days even though we had asked for a year," lawmaker Demetris Syllouris told reporters. "This kind of behavior is unacceptable."

With Bitcoins changing digital hands for over $260 this morning, having doubled in a week (and exponentially risen in weeks), many have asked how to 'trade' or 'short' this virtual currency. Well, perhaps the answer is here. As TechCrunch notes, Coinsetter - a NY-based startup looking to launch a trading platform for Bitcoin has raised $500,000 in seed capital. The platform will allow leverage (via margin) and the ability to short the market. We can only imagine the hour-by-hour margin changes. Furthermore, Coinsetter intends to offer accredited investors (because wealth equals smarts, right) the ability to earn interest on Bitcoins. To put his money where his mouth is, Lukasiewicz, a former JPM investment banker, has said that he will "put up at least $50,000 of his own money towards the platform's initial margin reserves." Forget NFLX; Ignore FNM; day-trading Bitcoin with leverage is the new normal. What's the opposite of catching a falling knife?

Sometimes you just have to sit back, gaze at some charts, and say WTF...

Now is the time to think about how you would live your life if your real value was appreciated and fairly compensated.

Bitcoin has been all the rage lately. The stuff, or lack thereof, runs on peer-to-peer technology, is fully decentralized, has no patents, and is open source. Currently, there are almost 11 million bitcoin units in existence and the maximum amount of bitcoin units that will ever be created by the logic of its design are 21 million. While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. There is no doubt that bitcoin is a spontaneous answer to the monetary instability that we see all around us today. On one side of the pond people are worried about the glorified currency peg known as the Euro and on the other about the amount of damage that Bernanke is willing to inflict upon the world’s reserve currency. However, let us not become so enamored of an innovative stateless solution that we forget Austrian economics and hitch libertarianism’s wagon to something heading for a crash.

Following yesterday's note on the near-record level of shorts in Silver futures, it is perhaps just a coincindence that spot silver prices are surging today - their biggest jump in seven months. Gold is also having one of its best 3-day runs in the last nine months, yet both moves are peanuts compared to what is going on in the "electronic" asset arena, namely the policy vehicle formerly known as "stocks" and BitCoin, both of which are racing for the title of most insane parabolic bubble ever.

Are bitcoins better than fiat currencies? Of course. Are they immune from banker manipulation? Possibly but the verdict is still out. Are BTCs sound money? No.

One can only sit back and watch...

The news surrounding Bitcoin is now coming in so hard and fast it is virtually (pun intended) impossible to keep track of it all.  It was just this past weekend that I highlighted a website that shows some of the various retail locations around the world where you can spend your BTC.  Just today, w discovered that New York property management company, Alvic Property Management, is accepting Bitcoin for rent and maintenance payments at all of its properties. Guess someone forgot to tell them it’s a bubble...