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Fortress Loses Millions On Bitcoin Investment

Submitted by Tyler Durden on 02/28/2014 19:52 -0400

Readers will recall that back in October, when the only way for Bitcoin seemed up, none other than the head of sophisticated hedge fund/private equity megafund Fortress Group, Michael Novogratz, recommended buying Bitcoin: "I have a nice little Bitcoin position,” Novogratz said. "Enough that I’m smiling that it doubled... Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

Or, you can come back in a few months and now that the momentum euphoria is over and done with, watch it be worth far less.

According to the FT, Fortress "is sitting on losses of $8m on an experimental investment in Bitcoin. The company’s annual report revealed that it bought $20m of the virtual currency in the final months of last year, making it the first mainstream investment company to list Bitcoin among the assets on its balance sheet."

The value of its position was already underwater by the end of December, however, and the price of Bitcoin has continued to slip this year amid scares over the underlying technology and the bankruptcy of what was once the largest virtual currency exchange.

By buying the currency for its own account, Fortress not only places a small bet on its future value but also learns more about the practicality of using Bitcoin as a financial instrument in the future and about the potential for business built around virtual currency.

The company deemed Bitcoin too speculative, however, to put in any of the funds it manages on behalf of other investors.

Good. Because as of year end, Fortress valued its stash of Bitcoin at $16.3 million at the end of December. Since then Bitcoin has fallen by a further one-quarter so far this year, cutting the value of the stake to $12.1m at mid-Friday prices. The bankruptcy of the formerly biggest Bitcoin exchange will do that.

As for Fortress, don't cry for the asset manager: "The experimental stake in Bitcoin represents a fraction of Fortress’s $2.6bn balance sheet. The company manages $61.8bn in assets and posted a 121 per cent rise in net income to $484m for 2013."

Oh well: on to the next gigamomentum (to borrow a popular prefix) investment which sophisticated investors buy into and just because the dumber money always chases on their coattails, makes them believe what incredible investors they are. So for anyone following in Fortress' footsteps: go for it, just don't come back to check on your money "in a few years." It will have long since been "disappeared." Come to think of it, just like those millions of Mt. Gox bitcoins...

- advertisements -

Fri, 02/28/2014 - 20:37 | 4492113 fonestar

Of course it can. Bitcoin has finished every December higher than the last.

Fri, 02/28/2014 - 21:16 | 4492242 sleigher

not 5 figures high... I even agree that it can do that, just not in 2014. no way. Maybe 2020, or 2024...

Fri, 02/28/2014 - 22:10 | 4492385 Spigot

Go back and look at the charts. I do not believe you understand what is happening here.

Fri, 02/28/2014 - 23:13 | 4492513 TheHound73

Approx. 0.1% of the world owns any bitcoin and the price hit $1100. The percentage of bitcoin owners has plenty of room to increase, and rapidly at that. Not making any predictions, just a perspective.

Fri, 02/28/2014 - 21:52 | 4492337 lotsoffun

fones - show them the 'head and shoulders' charts!!

Mon, 03/03/2014 - 03:17 | 4500534 MeelionDollerBogus

Is it this one?

http://media.heavy.com/media/2013/12/doge-bears.png

Sat, 03/01/2014 - 08:49 | 4492984 negative rates

Since we all know how reliable december's can be.

Fri, 02/28/2014 - 21:02 | 4492202 RevRex

and HOPEfully, I'll find a unicorn that shits milkduds

Fri, 02/28/2014 - 21:15 | 4492236 knukles

Fuck me man; now that's lowering our standards from Rainbow Colored Skittles

_{^{it'll make sense in a moment}}

Fri, 02/28/2014 - 21:48 | 4492327 Cpl Hicks

Well, Barry did get reelected.

So there's HOPE!

And you can keep looking for the change.

BTW ,Is Fonestar just Tyler just doing the fight club thing?

Fri, 02/28/2014 - 21:19 | 4492252 jcaz

No question about that- 0.0001....

Fri, 02/28/2014 - 21:27 | 4492274 JamesBond

is that satoshi in the lower right corner of that photograph?

Fri, 02/28/2014 - 23:51 | 4492570 medium giraffe

"Bitcoin will hopefully finish 2014 in the five figures."

AHHHHHHHHHHHH HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA!!!!!!

Fri, 02/28/2014 - 20:03 | 4491966 krispkritter

You really can't be that stupid and gullible? Oh wait, nevermind.

(doesn't your Mom ever take away your computer priveleges for spunking her curtains?)

Fri, 02/28/2014 - 20:08 | 4491987 GrinandBearit

Sure he can.

Sat, 03/01/2014 - 04:25 | 4492796 nomofiat

as an early adopter and major bitcoin holder, i have to admit that cult like idiots liike you are really starting to piss me of.

Can't you do the bitcoin 'community' a favor and just shut up for a change. how old are you anyway?

you are not helping the good cause, even i am getting annoyed with bitcoin after a dose of your megalomaniac bullshit.

u must have no friends if no one ever told you this.

Sat, 03/01/2014 - 05:49 | 4492864 FinalEvent

dude, just close your eyes, or leave.

Fri, 02/28/2014 - 20:12 | 4492009 Silveramada

1st rehab clinic for bitcoins users now open!

Fri, 02/28/2014 - 21:00 | 4492198 ThisIsBob

FBI

Fri, 02/28/2014 - 22:28 | 4492421 Rentier88

JU GOT OWNED!

Fri, 02/28/2014 - 19:54 | 4491920 Dear Infinity

Ben won't save them

Fri, 02/28/2014 - 20:11 | 4492003 RafterManFMJ

Uncle Ben? The happy curly white haired purveyor of rice?

Fri, 02/28/2014 - 19:55 | 4491924 statelessman

Hows that a loss, I didn't read about them selling the coins.

Fri, 02/28/2014 - 19:55 | 4491927 Martel

They just got in late in the game. The next months will be bleak, but bitcoin is far from done.

Fri, 02/28/2014 - 23:16 | 4492516 TheHound73

Mining power increased about 300% in 3 months. Off the charts at 30 million gigahash per second. Miners must know something the rest of us don't.

Mon, 03/03/2014 - 03:15 | 4500531 MeelionDollerBogus

Ya: mommy's paying the power bill.

Fri, 02/28/2014 - 19:56 | 4491928 booboo

If I'm not mistaken that is Ben Bernanke's kid.

Fri, 02/28/2014 - 19:56 | 4491932 NOTaREALmerican

8m dollar loss?

8 MILLION? Don't the hubcaps on the private jet cost 8 mil?

Not even sure this would be a rounding error.

Fri, 02/28/2014 - 19:57 | 4491936 agent default

Fonestar, make sure you buy the dip.

Fri, 02/28/2014 - 20:00 | 4491951 krispkritter

Self-purchase?

"Come back in a few years and it’s going to be worth a not."

Fri, 02/28/2014 - 20:02 | 4491962 fonestar

fonestar always BTFBitD!

Fri, 02/28/2014 - 20:21 | 4492056 agent default

MDB? Are you trolling under a different handle now?

Fri, 02/28/2014 - 21:50 | 4492333 lotsoffun

agent default - i think correct. i love this guy! he calls out a good fight, and he's got us all up in feathers.

brill! this is the real MDB. give him the credit he deserves. now - he's been exposed, has to move on.

Sat, 03/01/2014 - 00:05 | 4492585 gonetogalt

I think you're onto something here. If the real MDB is a Tyler, and Paul Krugman was a Tyler, and Fonestar is a Tyler, what do you think Tyler's position in btc is? Hmmmm....

(and plenty of clicks as a bonus)

Fri, 02/28/2014 - 19:58 | 4491938 mayhem_korner

If bitcoin is virtual then the losses are virtual, right?

No? That logic doesn't work? Poo.

Fri, 02/28/2014 - 19:59 | 4491940 One And Only

And WHAT is wrong with bitcoin?

What price was bitcoin last year at this time?

Nuff said.

Fri, 02/28/2014 - 20:03 | 4491965 fonestar

There are major problems with Bitcoin according to dipshits that don't own any Bitcoin and don't know what the fuck they're talking about.

Fri, 02/28/2014 - 20:06 | 4491980 GrinandBearit

And you'll keep saying that all the way down to ZERO.

Fri, 02/28/2014 - 20:08 | 4491984 fonestar

Who has been right so far dipshit? Go back and read my history since $50 BTC.

Fri, 02/28/2014 - 20:10 | 4491996 GrinandBearit

You'll buy and pump it all the way down to ZERO.

Fri, 02/28/2014 - 20:26 | 4492074 KingFiat

Sorry to defend fonestar, but that would not make sense.

Sat, 03/01/2014 - 00:39 | 4492631 tmosley

And I will be buying silver all the way down to zero.

But, but that's different...

Mon, 03/03/2014 - 03:14 | 4500529 MeelionDollerBogus

silver can be directly applied to wounds as an anti-biotic.

Bitcoins have no such value.

Fri, 02/28/2014 - 20:35 | 4492104 g speed

some info please---where would you go to exchange Bitcoin for FRNs if needed? Its a ligit question so try to treat it as such.

Fri, 02/28/2014 - 20:42 | 4492130 fonestar

Just go to localbitcoins.com.

Sat, 03/01/2014 - 08:51 | 4492986 negative rates

He means exchange them for drugs, and then sell the drugs for cash.

Mon, 03/03/2014 - 03:14 | 4500527 MeelionDollerBogus

http://flic.kr/p/kyKgtF

going rate: $6 per bitcoin localbitcoins

Fri, 02/28/2014 - 21:49 | 4492331 crash commando

or Coinbase.

Sat, 03/01/2014 - 00:26 | 4492606 g speed

at Fonstar and crash commando-- both those sites seem be set up to sell bitcoin rather than buy from a seller---very low limits on what I would be able to sell--just wondering ---seems a little one sided-- more sellers for sure than buyers. It's going to be tough to get my money if I sell any product for bitcoins--most my sales are in the $15-20K range-- comments ??

edit-- none of the businesses I buy material or commodities from will take bitcoin so I would have to convert to FRN to do business

Sat, 03/01/2014 - 00:42 | 4492635 tmosley

Your first impression is the opposite of the truth. Coinbase has a buy limit of 10 BTC/day for users who value their privacy, but a sell limit of 50.

If you are taking BTC, you will have absolutely no problem using coinbase.

Sat, 03/01/2014 - 03:57 | 4492778 TheHound73

Coinbase and Bitpay both activly support merchants. Coinbase charges 0% fees on the first $1 million of BTC converted to USD.

Fri, 02/28/2014 - 20:08 | 4491988 mayhem_korner

Other than it defaulting as a currency by one if its changers, what is wrong with it?

FWIW, your moniker anagrams to TON 'F ARSE. Don't read into it...

Fri, 02/28/2014 - 21:14 | 4492235 RevRex

I don't have AIDS either, but I still know it's not a good thing....

Fri, 02/28/2014 - 20:04 | 4491970 mayhem_korner

"Price" is irrelevant. The value of the bitcoins you can hold in your hand never changes.

Fri, 02/28/2014 - 20:22 | 4492060 Martel

What price was bitcoin last year at this time?

$33.5, so it has only been like 16-bagger. What a lousy investment. Gold, on the other hand...

Fri, 02/28/2014 - 21:21 | 4492257 jcaz

...Jumped off building, just passed the 8th floor, all well so far....

Fri, 02/28/2014 - 19:58 | 4491941 homiegot

This is getting sad. Bitcoin theoretically sounds like a great idea, but then you have to deal with the human beings that run it. Some of these people are scum. Never fails. Regulation ain't all that bad compared to losing it all.

Fri, 02/28/2014 - 20:10 | 4491954 One And Only

You want to talk about regulation being not that bad?

Enron

Madoff

Long Term Capital Management

Bear Stearns

Leahman

Goldman Sachs

This list is just too fuckin long to continue. So much for regulation.

Good jokes tonight.

Fri, 02/28/2014 - 20:04 | 4491973 fonestar

fonestar couldn't care less if this scares 90% of people out of ever getting involved in Bitcoin. The money-laundering capacity of Bitcoin alone guarantees it's going to the moon.

Fri, 02/28/2014 - 20:50 | 4492159 dogbreath

You mean currency laundering capacity and that is exactly why it will not end well for most people especially the little ones. It is also way to volitile to be a place where currency can sit for longer than the time it takes to cross a border. It seems to be attracting major leauge scum bags too. And yes I don't own any.

Fri, 02/28/2014 - 21:14 | 4492234 RaceToTheBottom

" The money-laundering capacity of Bitcoin alone guarantees it's going to the moon."

OK, How is that not going to become the focus of the FED and its operational arms, the NSA, the FBI and a boatload of other statist groups?

Oh it already is...

Fri, 02/28/2014 - 21:45 | 4492313 lotsoffun

hey fones. thanks. i had enough vodkas, i get it. you are MDB, the real one.

Sat, 03/01/2014 - 00:45 | 4492638 tmosley

Capital control evasion is the big use.

Bitcoin is the same as a long on capital controls. At this point in history, what kind of idiot would be SHORT capital controls?

Note that a prediction that bitcoin will fall is the same as claiming that there will be fewer capital controls in the future. EXACTLY the same, given the tight correlation between bitcoins bull periods and capital controls in Cyprus and Argentina.

Sat, 03/01/2014 - 11:21 | 4493266 resurger

Ya bitcoined...

Fri, 02/28/2014 - 19:59 | 4491942 docmac324

Dont mess wih Texas.err the USD, or you will pay.

Only gold/silver have a chance simply because they were here the dollar, and will be here after.

Fri, 02/28/2014 - 20:00 | 4491944 buzzsaw99

re pic.: same as it ever was. smug on the way up, whiny little bitchez on the way down

Fri, 02/28/2014 - 20:03 | 4491967 Iam Yue2

WTF Moment. Anyone seen Hugh Hendry?

Zerohedge time to dig out the analyst reports from last yeat when Bitcoin was circa $1200.

Fri, 02/28/2014 - 20:03 | 4491968 stant

i am from nigeria and i will gladly send your bitcoins back that were by mistake wired to my accouint. so send me your account info and i will return it.

Fri, 02/28/2014 - 23:39 | 4492012 One And Only

Thank you so much for your kindness.

You can send them to one of my wallet addresses.

1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

Sat, 03/01/2014 - 05:05 | 4492824 TPTB_r_TBTF

[Some of] The FBI's holdings:

Final Balance 144,341.5267317 BTC

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

Fri, 02/28/2014 - 20:18 | 4492035 Atomizer

REQUEST FOR URGENT BITCOIN BUSINESS RELATIONSHIP

http://www.lpconline.com/Nigeriasample1.html

Fri, 02/28/2014 - 21:21 | 4492256 knukles

I ams governer of the cEntral Bank of Nigeria, home of fambulus US president Obie Obahama and he has said you to endroll me in your accony ionformation for many Bitcoins I have found in sack under of MrReggie. You sent me $1,000,000 U$ fed funds wire transfrer and I make you richer than Saint PauliGirl.
-Valkeire Jharrett, friend of Jamie "cufflinks" Diamonds

Fri, 02/28/2014 - 23:08 | 4492500 Mike Hunt III

It is apparent that you don't understand how bitcoin works. And you got 20 upvotes and zero down votes . Amazing.

Sat, 03/01/2014 - 05:00 | 4492819 TPTB_r_TBTF

it is apparent that you donT understand how sarcasm works.

Sat, 03/01/2014 - 05:30 | 4492846 Mike Hunt III

I realized it was a joke, but wasn't sure if other Hedgerz understand that bitcoin is not similar to a bank account from which funds can be pulled. There is plenty of misunderstanding how bitcoin really works up in here.

Sat, 03/01/2014 - 07:48 | 4492927 TPTB_r_TBTF

yeah, the comment might be misleading. Although, i could imagine a nigerian asking for front money via bitcoin to cover the legal expenses for moving his "inheritance" out of the country. He would promise to reimburse me with a big bonus via bitcoin.

Stupid people will get conned (already have) via bitcoin. That's not any fault in bitcoin, of course. That seems to be inherit to currencies.

I saw comments in btc-e's trollbox that one dope loaned, i guess bitcoin, to a couple people and they didnT pay the loan back. Seems they talked him into some loan-shark style loans, but the sharks were the borrowers. lol, Stupid is as stupid does. Unfortunately when things like this happen, the coin is going to [wrongfully] take the hit in the MSM.

Fri, 02/28/2014 - 20:03 | 4491969 GrinandBearit

Bitcoin will return to it's intrinsic value...

ZERO.

Sat, 03/01/2014 - 00:48 | 4492640 tmosley

Where does gold's intrinsic value come from?

And don't say history. It has been accepted for a long time for a REASON, not just because it has always been accepted.

Once you understand, you will understand why bitcoin has intrinsic value too.

HINT: Gold isn't valuable because its shiny, nor because it is useful in industry.

Sat, 03/01/2014 - 19:05 | 4494959 GrinandBearit

Pathetic nonsense.

Bitcoin true value = ZERO

Mon, 03/03/2014 - 03:09 | 4500523 MeelionDollerBogus

wrong.

Gold's intrinsic value comes precisely from physics which permits its various atomic & chemical uses, and induces its rarity vs other elements.

Gold is valuable because it's shiny, as reflective properties are indeed used & come with the conductive properties which are used far more than the reflective properties.

Intrinsic value is imbued by an atomic nucleus.

Mon, 03/03/2014 - 03:08 | 4500515 MeelionDollerBogus

http://flic.kr/p/kyKgtF

hit $5.76 on 2014 Feb 28 6pm British time.

Almost to 0.00. Will happen every soon.

Fri, 02/28/2014 - 20:06 | 4491976 ebworthen

So that guy in the picture flew all the way to Tokyo for an apology and to inhale hot particles from Fukushima?

Wonder if the bow of contrition from what's his name softened the blow at all?

Fri, 02/28/2014 - 20:12 | 4492002 Atomizer

ChairBitch will not publically disclose the details, allow me to explain. There will be no competition in creating universal counterfeit fiat currency. An audit may sway her position. King of the mountain children games never end.

Fri, 02/28/2014 - 20:19 | 4492042 One And Only

Fiat currency is issued by government declaration - in most cases ad infinitum.

Bitcoin is limited in how many can be created and it's authenticity is verified with a public ledger.

Bitcoin is not fiat.

Fri, 02/28/2014 - 21:06 | 4492216 Atomizer

Lick my balls One and Only. We have been in a currency war since 2008. I have openly stated how this will play out. The EU one currency model is in dire straits. If the Negro president decides to complete his planned objective under Central Planner orders. He will be ousted. End of story!

Sat, 03/01/2014 - 04:48 | 4492811 TPTB_r_TBTF

The prez, regardless of race, will attempt to complete the planned objective of the Shadow Govt (aka Central Planners) or he will be assinated.

Who do you think the prez is more scared of?

The Shadow Govt or
the Sheeple who want him impeached?

Fri, 02/28/2014 - 22:47 | 4492459 orez65

"Bitcoin is not fiat."

Fiat money are "notes"

Bitcoins are "digital notes"

Neither are "money"

Sat, 03/01/2014 - 00:50 | 4492641 tmosley

"Bitcoins are "digital notes""

No they aren't, and if you think they are then you don't know what debt OR money is and you should shut up while the adults are talking.

Mon, 03/03/2014 - 03:07 | 4500513 MeelionDollerBogus

Notes have a string of digits to identify their unique ID. All fiat currencies have this as do bitcoin strings of digits.

Those currency notes are traded for other currency notes or services or goods.

Bitcoin so far still does that.

That's the facts, ma'am.

Fri, 02/28/2014 - 20:33 | 4492096 KingFiat

Sure there will be competition, it is already here. Network effects means the best currencies win.

Sat, 03/01/2014 - 04:43 | 4492810 TPTB_r_TBTF

network effects means the best currency loses slowest.

the one which loses slowest is the winner.

Fri, 02/28/2014 - 20:14 | 4492022 RaceToTheBottom

WS Wizards

Fri, 02/28/2014 - 20:21 | 4492043 SpanishGoop

CNN Bitcoin exec "Only invest what you can afford to lose, Bitcoin executive says of digital currency"

http://edition.cnn.com/2014/02/28/business/only-invest-what-you-can-afford-to-lose-bitcoin-executive/

Invest ???

Fri, 02/28/2014 - 21:32 | 4492263 knukles

Bloomberg says Gold is not manipulated, so Bitcoin Cannot Be!

Fri, 02/28/2014 - 21:24 | 4492265 nmewn

Yes, "invest".

In his own twisted way, phonestar tells the truth. The more people "invest" OF THEIR OWN CURRENCY the higher it goes.

Ponzi.

The lawsuits are just starting now against Mt.Goop, to be followed by every statists wet dream...regulation. But have no fear, every BitWallet is safe & secure, nothing can be stolen from it because nothing was ever there to begin with.

Fri, 02/28/2014 - 22:19 | 4492345 TheHound73

Of course you are right, nmewn. When more people "invest" in a fixed-supply item the price usually declines. This happens with gold, therefore gold is not a ponzi. Should bullion stores be under heavier or lighter regulation? Full AML/KYC for every ounce purchased?

Fri, 02/28/2014 - 23:17 | 4492517 nmewn

You and Kirk are among the more sane ones in this (yes thats my green) but your description of supply and mine are two very different things.

There is no "store of digits" that would ever compel me to "invest" in them. Gamble, yes. Invest, no. I can do that with on-line poker.

I'd have to be pretty desperate to push the real through the matrix at this point and I'm not.

Fri, 02/28/2014 - 20:29 | 4492084 quasimodo

So when can we expect the next reality show to replace "Gold Rush"?.....a show that features bitcoin mining.

Que a dramatic scene deep inside the bowels of some huge room full of equipment "mining" the coins.

Pan camera to an old fucker named Jack, who in a moment of stupidity trips and on the way down grabs some very important power cords, setting off all sorts of red lights, at which time his morbidly obese son utters some profanities and waddles off to fire up the back up supercomputer.

Sat, 03/01/2014 - 09:42 | 4493022 frenzic

What the frig Jack?

Fri, 02/28/2014 - 20:31 | 4492089 Johnny Cocknballs

his name is Fonestar.

He is a trusting sort.

And he has a goatee.

Fri, 02/28/2014 - 20:31 | 4492090 itchy166

Buy high sell low.... wait a minute!

Fri, 02/28/2014 - 20:40 | 4492126 KingFiat

It is the way it is with anything financial:

1) Buy low.

2) find a greater fool buying at a higher price

3) ???

5) Profit.

If only I could find out what 3) is, I would be rich :)

Fri, 02/28/2014 - 21:40 | 4492302 lotsoffun

here is a free wall street mba. i did my time at goldmine shacks.

1 - buy low

2 - sell high

3 - in between - lie

Sat, 03/01/2014 - 00:22 | 4492609 MEAN BUSINESS

and pay the trucking both ways? You might be a farmer...

AT least with CCs the 'trucking' is really cheap

Fri, 02/28/2014 - 20:33 | 4492097 mumbo_jumbo

to the hipster in the pic, the short answer? in some one else's pocket. LOL

Fri, 02/28/2014 - 20:34 | 4492102 Peter Pan

Bitcoin is a preview of what will happen to paper currencies so those that laugh at the plight of bitcoin need to be warned.

It is however fascinating to see humans constantly devise alternative means of value and exchange when nature already has given us the means to achieve both.

Sat, 03/01/2014 - 04:38 | 4492807 TPTB_r_TBTF

bitcoin has too many similarities to paper.

Fri, 02/28/2014 - 20:35 | 4492103 Ban KKiller

Fortress Investment Group formally ran by Mr. Mudd who ran Fannie Mae into the ground? Fortress Investment Group who own Nationstar Mortgage, LLC? Fuck You FIG...

FIG to be investigated for ________ in 2014. Rats are already jumping ship.

Fri, 02/28/2014 - 20:39 | 4492121 TheCosmicTaco

Bitcoin founder last seen heading for Ouagadougou on Nigerian Airways flight 419.

Fri, 02/28/2014 - 21:27 | 4492275 knukles

419, eh?
The flight, accompanied by unlimited supply of...

(Pill imprint GG 419) ...Trazodone hydrochloride 50 MG, which is used in the treatment of insomnia; anxiety; depression; sedation; fibromyalgia and belongs to the drug class phenylpiperazine antidepressants. It is not subject to the Controlled Substances Act.

Order a bunch from Canada for fonestar

Fri, 02/28/2014 - 20:46 | 4492137 Bunga Bunga

Big money missed the train and got lubed now. Get over it, your loss is my gain!

Fri, 02/28/2014 - 22:12 | 4492191 itchy166

Bitocin is just as useful at $1 per Bitcoin or $1000000 per Bitcoin. The price doesn't matter. Have you ever tried sending money out of the United States in a hurry? Good luck with that.

I had to send a same day transaction through Western Union in the United States to Canada. Maximum same day transfer is $1000 and it COSTS $200 to send!!! Also, you need to to give them ID, and then their security office will phone you, ask you where you got the money, who its for, why are you sending it, what will it be spent on, if you plan on sending similar transfers in the future, when was the last time you communicated to the reciever, if you discussed the transaction in that last communication, do you phone them often, do you ever text them, the reciever's name, address and phone number, and the relationship between you and the sender, etc.

I can do a wire transfer from my US bank to my Canadian bank, but again, I have to share all me information with (both) governments, the maximum transfer is $10,000, it costs $50 per transfer, it has to clear an intermediate bank (Bank of America) who skim fees, and they wont guarantee quicker than three days (although it usualy takes one business day).

I've been a Bitcoin fan ever since. I don't even have to send Bitocin across borders. Bitcoin is ALREADY on all sides of every border. As an investment however, I don't ever hold more than a month's salary worth..

Hoarding will kill Bitcoin, and high profile thefts/bankruptcies like Mt Gox only discourage hoarding.

Sat, 03/01/2014 - 00:53 | 4492646 tmosley

This guy gets it, for the most part.

Hoarding doesn't kill currencies ever. It only increases the value of that which is circulating (there is a reason monetary velocity explodes during hyperinflation).

Sat, 03/01/2014 - 05:15 | 4492833 TheHound73

"In the end, to become a currency, Bitcoin must have value which only comes from speculators holding it for various reasons. The more people are holding it, the better currency it is. Hot potato that no one wants to hold will never be a medium of exchange because it’s value does not exist." - Oleg Andreev

Sat, 03/01/2014 - 11:45 | 4493348 Angus McHugepenis

itchy166: I'm sure it's a friggin nightmare trying to send money from the US to anywhere, but it's all for the children and to fight trrrrism.

I have the exact opposite experience. I often sent cash payments from Canada to Hong Kong via MoneyGram (available in any Canada Post office). It's a mere $10 fee for under $1,000 if I recall correctly and the transfer is verified within seconds as I stand there. NO I.D. required, and I even signed up for an account card using a fake name without showing I.D.

Last year I sent a silver Maple to the US via priority post and it took 31 fucking days to arrive. This unacceptable delay is entirely on the US side. I've sent physical silver across the world and it arrived within TEN DAYS! We once had a check sent from Phoenix, AZ to us and the customer paid for priority service (3-5 days or so) but it still took THREE WEEKS to arrive! This isn't just incompetence of the USPS, it is the madness and paranoia of the regime in the US.

I've had several discussions with "seek" about BTC and he is one of the most knowledgeable members here about BTC. I'm certainly not against it and I even set up MultiBit on his advice, but since 99.9% of my purchaces are local, even seek said BTC wouldn't be much use to me. I would have gladly given BTC a shot for the few purchases I made from overseas, but it takes two to tango with BTC. If the other person doesn't accept it, then it's a no-go.

Speaking for myself only, BTC is just not very useful for me at this time. Perhaps in the future if using such services as MoneyGram become as expensive, paranoid, and cumbersome here as they are in the US.

Mon, 03/03/2014 - 03:02 | 4500502 MeelionDollerBogus

What's not useful is $1000 in bitcoin could be worth $50 in about an hour. The transaction fee you're trying to avoid is far smaller than the time-losses of bitcoin.

http://flic.kr/p/kyKgtF someone here got stuck collecting only $5.76 on bitcoin and it will happen again and then be 50 cents.

That's a far cry from $1200 recent (and all-time) fiat high (cost to acquire) btc.

Epic fail.

I could send via paypal or interac with barely any delay or fee, nothing like what you're talking about.

Fri, 02/28/2014 - 21:04 | 4492208 Joebloinvestor

This may or may not be a coincidence:

http://www.thecrimson.com/article/2014/2/20/harvard-odyssey-dogecoin/#

Fri, 02/28/2014 - 21:09 | 4492214 TheHound73

Personally, I'm right at my cost-average break even point. Am I worried? No. These digital tulips have always had bowel shaking volatility and have taken a shitload of hits lately... Holding up well, all considered.

Is Bitcoin Dead?

Fri, 02/28/2014 - 21:31 | 4492280 Atomizer

Don't know if Bitcoin is dead. If you buy gold/silver, you can sleep better at night. Parking assets, then transferring them into another emerging market fiat. /winks

Fri, 02/28/2014 - 22:22 | 4492409 Angus McHugepenis

My physical tulips trump your digital tulips.

Fri, 02/28/2014 - 22:38 | 4492439 Atomizer

The Dutch Tulip Bubble of 1637

http://www.history.ac.uk/reviews/review/666

Fri, 02/28/2014 - 23:26 | 4492529 TheHound73

You win this time, Angus McHugepenis. But I'll be back!

Fri, 02/28/2014 - 23:31 | 4492535 Atomizer

Now that was funny. +1000

Sat, 03/01/2014 - 13:50 | 4493841 Angus McHugepenis

Hound: Best laugh I've had in a while! Well played!

I'm not a BTC-hater either. I've had several chats with "seek" in the past and respect his advice. BTC just doesn't work for me at this point in time in my circumstances. I actually have more success bartering locally, and that's hard enough at the best of times. I rarely buy/consume products beyond my local markets so BTC isn't much use to me at this point. It's really that simple.

Sat, 03/01/2014 - 00:55 | 4492647 tmosley

My digital "tulips" can't reproduce in an exponential manner, like assets in a bubble do.

Sorry to shatter your illusions.

Fri, 02/28/2014 - 21:51 | 4492317 paint it red ca...

I just wish all you bitcoin pumps could hear me sitting here giggling about the mfglobal moment mt gox is subjecting subscribers to. i can feel the pain of the cyber non-money slipping through those virtual fingers as it POOF, disappears out of the bubble memory accounts?????

The difference is, corzine victims could not have guessed segregated futures account funds could be legally stolen
(UN-prosecuted). Bitcoin has been an obvious tulip bulb gambling operation from it's inception. Convincing arguments by notable net celebrities enabled the illusion, greed sustained the illusion which, at most, represents a fiat derivative of computing power.

It is unfortunate when good people get suckered, but the warnings of lots of ZH posters went denounced and unheard. Whats really sad is this is not the end of crypto gamblers with hopes of vast gains on this particular ponzi. Just like my good friend Jeffery who has been buying $20 lottery tickets monthly for near 15 years. He knows odds are slim he will ever be a big winner but as he says, "the odds are zero if I don't buy a ticket." Nothing quite like a lottery retirement plan.

Play on cryto gamblers, that ponzi game is not yet done.

Fri, 02/28/2014 - 22:49 | 4492370 TheHound73

"I heart dollars."

Sat, 03/01/2014 - 00:57 | 4492650 tmosley

"The difference is, corzine victims could not have guessed segregated futures account funds could be legally stolen"

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

I guessed that shit in 2009 when they started QE. I got out of the system back then. Those who remained didn't think, and reaped what they sowed, same as the fools who chose to speculate that Mt. Gox wouldn't go bankrupt.

Fri, 02/28/2014 - 21:53 | 4492342 The Most Intere...

The Most Interesting Frog in the World's picture

On a long enough timeline, the survival rate for bitcoin drops to zero.

Sat, 03/01/2014 - 00:44 | 4492637 MEAN BUSINESS

and in terms of geological time, gold zeros out the teenee-tiny micro nanosecond after BTC. *WINNING*

Fri, 02/28/2014 - 22:16 | 4492395 bcking

Bitcoin will win in the end. How many times do I have to repeat myself to you ignorant peasants? Jebus, give me a fucking break.

You will all be fed to the dogs one way or another. I would like to thank you all for allowing me, the great Kim Jong Un, to accumulate more Bitcoin at a insanely cheap price. You are all good slaves.

Fri, 02/28/2014 - 22:21 | 4492405 Atomizer

Everyone wins, pennies on the dollar.

http://www.forbes.com/sites/jordanmaglich/2014/02/28/bitcoin-exchange-mt-gox-files-for-bankruptcy/

Fri, 02/28/2014 - 22:25 | 4492417 bcking

What a stupid article. How can you regulate Bitcoin? Bitcoin can't be regulated. Unless they shut down the internet. Forbes is well entrenched in the current system so of course they're going to print shit articles. Keep riding in the horse and buggy. I'll wave at you as I pass you in my supercharged Corvette.

Fri, 02/28/2014 - 22:56 | 4492480 Atomizer

relax. read post ^ above. No need to reference the Tortoise and the Hare storyline. We’re all working together, remember that!

Sat, 03/01/2014 - 02:25 | 4492725 bcking

My butt hurts

Sat, 03/01/2014 - 04:26 | 4492797 TPTB_r_TBTF

Tell Dennis Rodmann to ram slower.

Sat, 03/01/2014 - 04:24 | 4492794 TPTB_r_TBTF

if bitcoin become's a crime

then only criminals will use bitcoin.

Fri, 02/28/2014 - 22:42 | 4492447 Maximilien Robe...

Great Kim Jong Un, I was wondering. Do you run your bitcoin mining GPU array on the same server with your Minecraft instance? That way you can mine Bitcoin, Redstone, Obsidian all on the same physical box. Shoot missiles into the ocean in the morning, get home and all your virtual currencies are ready to go for game-time.

Sat, 03/01/2014 - 02:25 | 4492724 bcking

Yes, I concur, Maximilien. You are funny. That is why I will kill you last while I force you to watch as dogs eat your family members alive. Then I will feed you to the dogs, my dear peasant. Enjoy your paper rectangles while they still have value.

You are a good slave.

Sat, 03/01/2014 - 04:23 | 4492792 TPTB_r_TBTF

and then you will eat the dogs?

Sat, 03/01/2014 - 00:58 | 4492651 tmosley

You're funny. I like you.

Sat, 03/01/2014 - 04:22 | 4492791 TPTB_r_TBTF

MDB is baaaack! with a new meme.

Fri, 02/28/2014 - 22:35 | 4492428 orez65

"Mt Gox where is our MONEY?"

This guy is a poop head.

What is it with these people? Don't you get it?

Bitcoin is NOT MONEY, it's a DIGITAL NOTE.

Just like US Dollars are NOT MONEY, they are NOTES. Just read it at the top of every US Dollar denomination: FEDERAL RESERVE NOTE.

It doesn't say Federal Reserve MONEY, it says Federal Reserve NOTE!!!!!!!

So, if you want to speculate on Bitcoins, may you win.

But don't call it MONEY!!!!!!!!!!!!!!!!!!!!

Bitcoins are DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES, DIGITAL NOTES ...

Fri, 02/28/2014 - 23:28 | 4492532 TheHound73

Money is a concept that exists nowhere but in a human's thoughts.

Sat, 03/01/2014 - 04:20 | 4492789 TPTB_r_TBTF

Money is many things to many people ...

... except on ZH, where money has a narrow definition.

I like your definition of money the best.

Mon, 03/03/2014 - 02:57 | 4500493 MeelionDollerBogus

No, money is a tangible consumable a human passes to another human by hand.

Nothing else is money.

There's lots of variability in mass, form, durability, but anything from pills, hammers, coins, pipes & ammunition are all money by the act, not the thought, of making a trade.

Everything else which trades as a proxy for money is not money, it is currency, and most of that currency is a debt-token. Federal Reserve Notes, Bitcoins & Euros are debt tokens.

Fri, 02/28/2014 - 22:51 | 4492472 I_KNOCKOUT_U

THANK YOU SATOSHI

Sat, 03/01/2014 - 09:40 | 4492953 satoshi123

You are welcome, my bitch, all your bitches who bought into my pyramid scam, Satoshi thanks you with fonestar's soiled toilet paper.

Fri, 02/28/2014 - 23:01 | 4492494 cpnscarlet

So when are we going to cut through this foney garbage and rehash all the characteristics of money and why bitcoins don't cut it.

NOT TRANSPORTABLE (no bitcoins if there are no computers)

NOT DURABLE (no power, no bitcoins)

NO LONG HISTORY OF ACCEPTANCE (and looking more tansient now)

Fri, 02/28/2014 - 23:23 | 4492526 Atomizer

The Federal Reserve ChairBitch is going to tell you the IMF SDR is the safest virtual currency option available. Furthest from the truth BTW. Watch the side show unfold.

https://www.imf.org/external/np/fin/data/rms_five.aspx

Fortress Loses Millions On Bitcoin Investment

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