• Sprott Money
    05/05/2016 - 06:02
    Why is a Deutsche Bank mouthpiece suggesting “negative retail deposit rates or perhaps wealth taxes”? The answer is to (supposedly) stimulate our economies.

Saxo Bank CEO: Bitcoin Faces Serious Challenges (Needs Link To Real Assets)

Tyler Durden's picture




 

Authored by Lars Seier Christenson, CEO Saxo Bank; via his TradingFloor.com blog,

When I saw Bitcoin trading at close to one thousand dollars, I wanted to kick myself! I should have seen it coming, a limited supply and a lot of hype and demand — it looks obvious in hindsight, as many things do.

And I can't excuse myself by claiming not to have been fully aware of Bitcoin, when it was trading far below ten dollars. My well-known libertarian leanings meant that a number of like-minded friends encouraged me to get involved in this new, non-statist, unregulated experiment. Shame on me, for not listening. I hope at least they made a lot of money.

The main reason, however, I did not get involved was longer-term concerns about the viability of Bitcoin, and in my view, those concerns still remain.

Bitcoin has been in the news a lot lately — and not all of it positive, such as the recent arrest of a Bitcoin trader in New York on money laundering charges.

I think Bitcoin has made a mistake by keeping its owners anonymous, although some users — including some highly undesirable ones — are embracing it for that very reason. This offers authorities an excellent excuse to ban it whenever, and wherever they wish. And this could easily be an unfair ban under false pretences simply because the authorities don't like the competition. China and Russia are just the first to react, I fear.

Due to the nature of its structure, banning Bitcoin will of course not eradicate it. But what it will do is make it impossible for law-abiding individuals and businesses to use it — and thereby render it practically useless anyway. So the false sense of security the, admittedly, irrepressible network provides Bitcoin will really not count for much, if there is a concerted move to restrict the Bitcoin market. I think therefore that it may well be advisable to accept and embrace some degree of regulation, although it will be counter-intuitive to many fans, if only to prevent an even worse reaction from governments that are not pleased to see their money printing monopoly challenged.

Of course, for early buyers wiser than me, the huge price rally has been terrific, but it also carries some negative consequences. I  think the elevated price and huge volatility — it has swung from a high of USD 1,242 in late November to around USD 500 in hours — will make it more difficult to gain acceptance among serious businesses.

So I think Bitcoin will face serious challenges in the long run, although I believe such digital currencies could have a place in the economy in more well thought-through structures with values better linked to real assets. There is no doubt that many central banks have made a mess of things with their own fiat money without linkage to reality, and it is entirely conceivable that the private sector could also in the area of currencies do a better job than public sector institutions. It does in pretty much every other area under the sun, so why not here?

Anything in the financial space that can be regulated will be regulated. Get used to it! This will also apply to digital currencies. But regulation could be their ticket to real acceptance and success — and should therefore not be seen only as a negative.

Bitcoin is still a very small part of the economic system and will not pose a serious threat to more established models any time soon. But if it does one day and it overcomes regulatory issues, it will be embraced.

Bitcoin is increasingly used by migrant workers to transfer money back home, and is therefore beginning to serve really genuine purposes, not just ideological ones, which is promising to see.

The extreme volatility and opaque ownership structure definitely poses a risk to all users of Bitcoin. And I believe there will be new and better models developing over time. It is rare that the first mover wins and takes all, and given the weaknesses mentioned above, I believe there is a lot of room for improvements.

There are at least 80 known similar initiatives out there, and of course most of them will fail. But I know personally of a couple of projects in the design phase that in my view are better constructions, and will be able to obtain rapid distribution, making them real competitors to Bitcoin. When they launch, I promise myself that I will be less cautious and also that readers of this blog will get to know about it at an early stage, so watch this space!

Saxo Bank does not currently offer trading in Bitcoin due to the concerns listed here. But we are reviewing the digital currency space on an ongoing basis, so we may revise this at a later stage.

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 02/10/2014 - 17:55 | 4421258 Flakmeister
Flakmeister's picture

How about Fonestar's '06 Ford Taurus?

Mon, 02/10/2014 - 17:55 | 4421273 fonestar
fonestar's picture

It was a Focus and an '05 actually.

Mon, 02/10/2014 - 17:58 | 4421285 fonestar
fonestar's picture

And this guy doesn't have a clue about Bitcoin if he thinks cryptocurrencies need to be linked to "real assets".  Perhaps he should sit in his office meditating upon the meaning of "counterparty risk"?

Mon, 02/10/2014 - 18:01 | 4421302 HyBrasilian
Mon, 02/10/2014 - 18:02 | 4421313 fonestar
fonestar's picture

All you need to know is that Bitcoin is the superior product and all of you should be buying Bitcoin at any price.

Mon, 02/10/2014 - 18:10 | 4421353 max2205
max2205's picture

Bid $0 ask $0

Mon, 02/10/2014 - 18:15 | 4421376 A L I E N
A L I E N's picture

He doesn't have a clue about bitcoin if he thinks it keeps its owners anonymous...

Mon, 02/10/2014 - 18:17 | 4421396 fonestar
fonestar's picture

Anonymity is a personal choice, not a technical feature.

Mon, 02/10/2014 - 18:44 | 4421506 Four chan
Four chan's picture

in before schiff's victory lap video.

Mon, 02/10/2014 - 18:45 | 4421517 fonestar
fonestar's picture

Schiff doesn't get Bitcoin.

fonestar gets Bitcoin.

Mon, 02/10/2014 - 18:48 | 4421530 akak
akak's picture

 

fonestar gets Bitcoin.

Yeah, right up the ass.

Mon, 02/10/2014 - 18:51 | 4421536 fonestar
fonestar's picture

I would inject the shit into my eyes.

fonestar loves the feeling Bitcoin gives.

Wed, 02/12/2014 - 14:20 | 4428721 boogerbently
boogerbently's picture

"And this guy doesn't have a clue about Bitcoin if he thinks cryptocurrencies need to be linked to "real assets". "

The what, pray tell, gives Bitcoin it's value"

Talk about "not getting it!"


Mon, 02/10/2014 - 19:50 | 4421808 fonestar
fonestar's picture

fonestar is offering free 0.025 BTC reward for first address and heil Satoshi under this post!

Mon, 02/10/2014 - 20:01 | 4421848 logicalman
logicalman's picture

I find it truly odd that you refer to yourself in the third person.

The word 'heil' is a bit worrying too.

 

Mon, 02/10/2014 - 20:02 | 4421852 fonestar
fonestar's picture

fonestar is managed by a PAL.

Mon, 02/10/2014 - 22:28 | 4422391 Colonel Klink
Colonel Klink's picture

PAL - Personal Ass Licker?

Mon, 02/10/2014 - 22:45 | 4422472 fonestar
fonestar's picture

It is a Physical Abstraction Layer you fool.

In a few short years it will be the virtual persona controlling the PAL though.

 

Mon, 02/10/2014 - 23:44 | 4422672 akak
akak's picture

I don't have the slightest clue what the fuck you are talking about, but it's still an automatic downarrow for me.

Mon, 02/10/2014 - 23:54 | 4422697 tmosley
tmosley's picture

I appreciate your reptillian brain's desire to smash that which you do not understand, but perhaps you ought to try for (literally) five minutes to understand what he is talking about before forming an opinion one way or the other?

http://en.wikipedia.org/wiki/Abstraction_layer

Tue, 02/11/2014 - 00:01 | 4422710 akak
akak's picture

If I spent five minutes of my life on wikipedia looking up every damned little thing that somebody else insisted I look up, I would spend the next 5000 years sitting here looking at Wikipedia.

By the way, I have been meaning to ask you tmosely: when are you going to change your handle here to "Trav777.2" and be done with it already?

Tue, 02/11/2014 - 03:33 | 4423044 TheHound73
TheHound73's picture

Basics of Bitcoin 3 minute video narrated in a fuddy duddy limey accent.  Saves 2 minutes of your precious life.

Mon, 02/10/2014 - 23:57 | 4422708 Colonel Klink
Colonel Klink's picture

Fool?  I'm not the one invested in Bitchcoin.  I believe it continually seeks a greater one.

Mon, 02/10/2014 - 20:20 | 4421904 fonestar
fonestar's picture

No takers? 

fonestar is offering real, honest money here folks!

Mon, 02/10/2014 - 20:53 | 4422033 fonestar
fonestar's picture

WITHDRAWN DUE TO LACK OF INTEREST FROM OLD FOGIES ON ZEROHEDGE

(Would have been gone 5sec on Reddit)

Mon, 02/10/2014 - 20:55 | 4422041 Rock On Roger
Rock On Roger's picture

I guess the old fogies are a little too smart for your silly games.

 

Stack On

Mon, 02/10/2014 - 20:59 | 4422058 fonestar
fonestar's picture

Yeah, can't teach a blind, deaf and dumb dog new tricks I guess.

Mon, 02/10/2014 - 21:39 | 4422184 Rock On Roger
Rock On Roger's picture

Aye, especially when that dog is a very young pup still on the teat.

 

Stack On

Mon, 02/10/2014 - 21:06 | 4422072 nmewn
nmewn's picture

lol...old fogies didn't cause BitCoin to flash crash today.

Your heavilly encrypted, nothing-can-go-wrong-until-someone-trips-over-the-plug-in-the-wall did that all by itself ;-)

Mon, 02/10/2014 - 21:52 | 4422243 fonestar
fonestar's picture

Nice try, more FUD.  It was caused by an outdone exchange thats lived past its day.

BTC is currently $685 USD on BTC-e, right where it was the night before this tragic, terrible, devestating crash.

Mon, 02/10/2014 - 21:11 | 4422091 FredFlintstone
FredFlintstone's picture

Heil Satoshi!

Mon, 02/10/2014 - 21:36 | 4422173 fonestar
fonestar's picture

Thanks for playing Fred but we needed an address too!

Mon, 02/10/2014 - 21:27 | 4422138 tmosley
tmosley's picture

Since no-one else is stepping up:

Heil Satoshi!

14h4nnMoFnQ2ZnqJrfGyka19mhR3o3wwQi

I'll donate it to ZH if and when they post a bitcoin address.

Mon, 02/10/2014 - 21:35 | 4422169 fonestar
fonestar's picture

Contgrats to Tmosley!  Here at Fonestar LLC we appreciate your fanaticism towards Satoshi conciousness and total Bitcoin adoption!

Mon, 02/10/2014 - 22:45 | 4422470 tmosley
tmosley's picture

Much appreciated, fonestar.

Will hold until ZH posts a donation address, though it they take too long, I may give it to the Center for Applied Rationality or the Machine Intelligence Research Institute.

Honestly, what does it hurt to get an address?  There are plenty of bitcoin millionaires out there, and my experience has been that they are extraordinarily generous.  Everyone with an internet presense should have one.

Mon, 02/10/2014 - 22:49 | 4422485 fonestar
fonestar's picture

Zerohedge doesn't want to "stir the pot" so to speak by posting a Bitcoin address, so they can use a dipstick like fonestar to do it for them.

Wed, 02/12/2014 - 15:19 | 4428957 unconscious_com...
unconscious_competent's picture

Heil Satoshi!

139wP88teX8KkwRT4Z1svhc4dmduDc2i8z

 

I know I'm late to the punch but there was a waiting period for ZH to confirm my account. I've been lurking here in the comments of ZH for some time now, debating with myself over wether or not to register an account and this offer was the comment that pushed me over that edge. Pleased to be here.

Mon, 02/10/2014 - 18:51 | 4421543 tmosley
tmosley's picture

Yes, goyim, be sure to link your distributed cryptocurrency to a central location so it can be regulated by the elite.

Mon, 02/10/2014 - 18:58 | 4421570 fonestar
fonestar's picture

Pretty funny listening to bankers pontificate on how we could make Bitcoin better isn't it?

Mon, 02/10/2014 - 19:40 | 4421771 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Yes, goyim

dats rayciss

Mon, 02/10/2014 - 21:29 | 4422148 tmosley
tmosley's picture

Yes goy.  It is completely racist to use words that communicate our true intent towards the goyim.

It's also racist for non Hebrews to read the Talmud.

Tue, 02/11/2014 - 09:44 | 4423450 madtechnician
madtechnician's picture

Please please drop the racism.

All faiths have extremist views , thankfully these are minority , marginal views . Some muslims think non muslims are infidels , some Christians think non Cristians are blasphemous , you cannot apply a minority viewpoint and smear that across an entire race or religion.

Mon, 02/10/2014 - 18:15 | 4421379 HyBrasilian
HyBrasilian's picture

Well then... fonestar... Since you INSIST to obfuscate... I'll make it EASY [for the others]...

~~~

FIRST LINK

How many BITCOINS do you pay to mail a letter?... Like... .0005714? (=.40 cents/$700 ~ Feb '14)... .0004571? (=.32 cents/$700 ~ whenever/assuming)... .0004? (=.40 cents/$1000 ~ Dec '13)... .002666 (= .40 cents/$150 ~ Oct '13)... .04 (=$10/.40 cents ~ Jan '13)

You should have singularly REVIVED this service by now... STABILITY BITCHEZ!

~~~

I'm not interested in 'Joos' ~ [as you invite, above]... Instead ~ I'm interested in a reasonable dialogue with regards to BITCOIN [viability]...

Whereby...

You FAILED to follow up on my inquiries HERE:

http://www.zerohedge.com/news/2014-02-10/china-orders-its-smaller-banks-...

~~~

2ND LINK

Speaking of 'typical poster' here... [& since you're the resident scribe]

~~~

Do me a favor?

Please give us an [UP TO DATE] accounting of "all the bitcoins mined thus far"...

For someone like yourself ~ A number like this should, EASILY, be at the top of your head [so I trust that is not a PROBLEMATIC request]...

The purpose of my inquiry is that I'd like to make a 'ball park' estimation as to the ENTIRE 'notional' value of the BITCOIN market [which could easily be determined by the aggregate number of MINED bitcoins TIMES their VALUE on exchanges]... I'm thinking that, from you, this information would be WILLINGLY FORTHCOMING [in that ~ it is undoubtedly your determined goal to PROVE that BITCOIN is 'where it's at' for the future]...

I anxiously await...

Mon, 02/10/2014 - 18:17 | 4421398 disabledvet
disabledvet's picture

actually he does have a good point about counter party risk.

I mean "but Prince Humperdink is a fine and upstanding gentleman!"

Mon, 02/10/2014 - 18:47 | 4421526 BTCTalks
BTCTalks's picture

Blockchain.info should provide all of the stats you are looking for. The total mkt cap for BTC currently is about $10bln.

Additionally, factoring in the crash from last night caused by MF Gox (this is only going to get uglier, btw) BTC closed on Friday at $692 and today at $670. Resilience does not a click-bait headline make.

Mon, 02/10/2014 - 18:50 | 4421534 fonestar
fonestar's picture

fonestar will be picking up cheap coins while the doomers proclaim the "end of Bitcoin" (part 12).

Mon, 02/10/2014 - 19:01 | 4421589 fonestar
fonestar's picture

"The End of Bitcoin"..... kind of like Police Academy!  The laughs just keep coming!

Mon, 02/10/2014 - 19:04 | 4421606 HyBrasilian
HyBrasilian's picture

The "laughs" initiate with your FAILURE to respond to either of my <above ^^^> inquiries...

Mon, 02/10/2014 - 19:11 | 4421638 fonestar
fonestar's picture

They've been addressed several times before by myself and others.

fonestar has pretty much thought of everything.

Mon, 02/10/2014 - 19:24 | 4421716 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

I LOVE THIS: "Bitcoin needs a link to real assets" Um you mean like the Dollar, Euro, and Yen?

Do NOT follow this link or you will be banned from the site!