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Fortress Loses Millions On Bitcoin Investment
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...
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Bitcoin is a distributed ledger recording ownership. Yes, it is digital.
You are so right. And to add to your completely valid points about the grid going down...what if a big ole asteroid hits earth like the one in that ArmyGeddin movie. Good luck spending your bitcoins then amirite? Also what about the zombies? It seems theres always a zombie apocolypse around the next corner. How ya gonna use bitcoins with zombies tryin' to chew your face off. Amirite?
Actually, it’s a bit more shifty.
Mr. Banker: We are no longer mailing out hard copies of your banking statements
Serf Depositor: What are my options?
Mr. Banker: You are now required to log into our super safe encrypted website to access all your banking needs.
Serf Depositor: Ok, sign me up
If a EMF goes off, no record of Mr. Bank robbery has any paper trail. Always insist on a hardcopy of money in your bank. If they refuse, close the bank account. Using the Bank of Sealy is much safer IMHO.
Gold is not transportable (if everyone is dead).
Gold is not durable (if everyone is dead).
Gold doesn't have a long history of acceptance (after everyone is dead).
OMG, we might have an extinction level even wipe out the internet, but that will kill us all too, so I guess there is no such thing as money because muh doomsday.
Nope. The bombs, EMP's and government take-overs of servers to shut them down will largely leave most of the population of Earth unharmed but will destroy all digital currencies completely.
bitcoins are transportable. "computers" are in many people's pockets. A smart phone is a "computer".
Power-need applies to dollars too. No dollars if the ATM donT got juice.
"long history of acceptance" is NOT a requirement.
"Acceptance from now on" is all that is necessary for a new currency. Acceptance. Period.
no juice needed for dollars at all:
paper & coin are dollars,
but paper bitcoins are useless as they can be spent electronically while the paper copy now has been invalidated.
Dollars existed before ATM's and when all the ATM's shut down dollars will still be used briefly before over-issuance of fiat trumps its use and we switch back to silver coins.
""long history of acceptance" is NOT a requirement. "
It is. It's super-critical.
Munch on Barack's ballsack long enough and you might get a bailout.
Maybe I am dense, but a medium of exchange should, as much as possible attempt to always have the same value.
A friend and I use to exchange Chickens and bails of hay.
But although it was easyto send half bails of hay, it was tough to send half chickens, so we agreed to use green paper te represent bails.
Over the years we could not figure out why it took more of the pretty green paper, it was the same bails of hay and the same chickens.
It would seem if you wanted to replace the prety green paper the first goal would be to be more stable.
The bigggest problem lies in the belief that you can make money by trading representatives of value.
A representative of value needs to remain stable.
Bitcoin failed the day I saw a headline that its value had tripled.
Let us review! Price is determined by supply and demand.
In the case of Bitcoins, supply is fixed. That leaves demand being the primary variable impacting price.
Bitcoins started with a single user 5 years ago and has been increasing exponentially since.
Stability will be reached when the number of users levels off.
Bitcoin is meant to be a medium of exchange.
You speak as if it was a commodity whose value is determined by supply vs demand
It is what it is. It is a distributed ledger that tracks ownership. The limited supply of the tokens tracked by the ledger are priced by humans mainly influenced by demand-side factors. Demand needs to saturate the available market before stability sets in.
You seem like you want to pigeon-hole bitcoin. It currently shows characteristics of a stock, currency, commodity etc. But bitcoin as currency is its first app. Some people call bitcoin money for the internet, but others are calling it the internet of money. Bitcoin is a protocol on which other apps can be built.
Bitcoin shows no such characteristics. It fails to have a physical form, it fails to be linked to a physical unit of measure even abstractly, it fails to be accountable to audits, it fails to be efficient due to an exponentially expanding blockchain & a requirement to use that blockchain to stop fraud, and it fails to bestow actual ownership on actual companies or products (like stocks do) or pay dividens (like some stocks do).
It fails at everything you claimed showing you fundamentally
TADdaaaaaaaaaaaa
And here we have it. Money is just a commodity whos primary utility is that it is most easily exchangable for other goods and services.
Incorrect. PHYSICAL prices are determined by supply & demand. INTANGIBLE prices are determined by the INSTABILITY of the intangible, such as debt notes, electronic tokens or the reliability of a warehouse or supplier of any goods eventually to be delivered in exchange of the tokens, and in this case, the reliability of the tokens themselves is in question too.
Stability is only reached when the number of users is MAXIMIZED not minimized and only IF reliability is assured at all levels of use: any banking/warehouse, any transaction wires, radio-paths, servers, computing devices.
Instability anywhere ripples to become instability everywhere & ends the use of bitcoin.
That's why despite the US dollar being a poor store of value over many years it is far more reliable than bitcoin because it is durable through all the same actions that threaten bitcoin in every single way.
Nerds! Nerds! Nerds! Nerds! Nerds! Nerds! Nerds! Nerds! Nerds! Nerds!
Bla fuckin' bla. I got out of Gox a year and a half ago, the problems were so obvious.
Bitcoin is not an investment vehicle, and should never have been treated as one. It's a PAYMENT METHOD. It doesn't have "intrinsic value", but it does have real utility: its value is whatever it saves you in fees, taxes, etc. versus accepting or paying a middleman with a private payment method. Insofar as it costs almost nothing to send, you can save a lot of money if you happen to transfer money internationally a lot, or run an online business. On the other hand, you spend a lot of time protecting your inbound transfers and making sure they're stored rationally in a basket of currencies or physical money -- i.e. it costs you some time and care to spread your transfers out and pull them out of the system.
I am sure it has some real value, which is what it saves in fees (probably 3-5% of transactions) minus what it costs in management time (less than that, in my experience). But what it really is is a fantastic payment method, assuming you don't irrationally just let it pile up at your trading house and hope for the best from whatever yahoo runs that website.
Structured Investment Vehicles, How to Make Money Like Top Hedge Fund Managers
^ MOST INTELLIGENT COMMENT I'VE SEEN ON ZEROHEDGE ABOUT BITCOIN
Bitcoin and "Intelligence", and ZH are oxymorons, you understand that right?
online payments in bitcoin are irreversible.
If i pay someone online in bitcoin, and he donT deliver, too bad for me.
NOT! I just wonT use bitcoin, at least not online.
And offline, i might still want the ability to chargeback, if the product or service turns out to be disputable...
"If i pay someone online in bitcoin, and he donT deliver, too bad for me."
Even worse, suppose you pay someone in Bitcoin, and he says "I never got it," or "I saw the transaction but it was never confirmed," or the blockchain forked and your transaction was on the fork that was dropped when the Big Boys decided which fork to save and which to kill. Or it went through an exchange and they lost/stole/mishandled it. What then?
At worst, you both lose the money. At best, you have a big mess to clean up. Either way, it's a problem. Unlike Visa, there is no customer service number to call, no big bank to complain to, no one to sue if it comes down to that, nothing.
And unlike visa, bitcoin can only handle ~7 transactions per second. But the anonymous programmers will change that, "they promised".
Bitcoin can already scale up dumbass , one line of code defines the TPS rate , this is an arbitrary number which can be modified on any new release of bicoin source code. As the network infrstructure scales up so will the TPS rate , its no promise it;s a fact.
No, that's an anti-fact, also known as a lie. A fulfilled bitcoin transaction requires external verification planet-wide of the blockchain & without this there is no transaction, only blind guessing & open-fraud.
The blockchain is publicly viewable to all, including courts. Proof of payment is right there including the ability to digitally sign for sending and receiving addresses.
Failure to deliver on a contract does not magically, legally go away if payment is made with bitcoin. Visa supports chargebacks and merchants pass those costs on to us, the consumers. Abuse of chargebacks by consumers far outweights failure to deliver by merchants, and we all pay. I understand many people really like the chargeback feature Visa provides and those people can go on using Visa to their hearts desire. Cash and bullion transactions do not have that feature.
Yes, it does magically go away. Bitcoin is not legal tender so no legal contract has been honored by law.
@Tyler,
"millions IN Mt. Gox bitcoins..."
Not "millions of Mt. Gox bitcoins..."
Last week >740,000 bitcoins were [supposedly] missing, now it's "millions".
hope it was his money. arsch
Michael Novogratz made a small fortune in Bitcoin
Unfortunately for him, he started out with a large fortune in Bitcoin.
So Bitcoin is trading at $0.00 and the technology and protocol are broken, useless, fraudlent, and of absolutely no value. Additionally, the entire ecosystem has abandoned bitcoin. Thank you for that update gartman/Liesman/Greenspan/CNBC . . . . . . . . er oops this was from ZH.
Comic relief all the guys here that think they are smarter than the market and do all of these premature touchdown dances.
$6 btc : http://flic.kr/p/kyKgtF
it happened Feb 28th.
Only fools could trust in any kind of "electronic" or "digital" currency as an asset, as well as only fools could rely on electronic vote.
Everything on networks and computers can be manipulated.
Agreed , we should get rid of all computers , the internet , electronic banking , telecommunications , aircraft , electricity and cars , and start using donkeys and move back into mud huts & caves.
It's not like you have a choice but that day is coming.
EMP's will wipe out all non-optical devices. Period.
No copper phone & internet wires, no fuel-injectors in cars, no radios, none of it. Burned.
You can deny this all you want but this is 100% happening.
aircraft: Ya, we call them gliders. Feel free to use those, they will not be affected.
A Chicago Bathhouse sues BITCOIN for $8 billion USD,
This is what we in the biz call "Heads I win, Tail you lose", ...
I think a long time ago, we said this but were ignored, but when the SHTF on BITCOIN, its the AIPAC lawyers who WALK with the 'coin' :)
*
A Chicago based law firm has filed a suit against Mt. Gox, which was once the largest Bitcoin exchange in the world, over loss of 8,50,000 Bitcoin units.
The Chicago 'bathhouse' where Obama first was seduced by Cass Sunstein, and lost his anal-cherry to Reverend Wright, now that same firm, is going to HOSE team-bitcoin(tm), my gawd does the world work in strange fucking way's. :)
Yet you are the one staring at a star without a hand to go with it.
My avatar is about BITCOIN, and I'm Jewish, and I felt that it was time that we spent more time focusing on how that Israel is a major force behind the BITCOIN fuck.
The CIA ain't christian,
and the MOSSAD ain't Jewish,
and I like many Jewish people like Soros, hate Israel and their suicidal policy's and what its doing to the world, and our people.
I have no hand out, nobody owes me anything, and I don't expect anything from another person.
Is that you Shatoshit 101 ? I thought you shills worked out of China ?
First Bitcoins, next Bencoins?
Would'nt that be Bend overcoins?? Yes it would!
For many people involved, Bitcoin is not an investment, it is a hobby, a do-it-yourself currency so to speak, like baking your own bread or making birdhouses out of scrap plywood. They don't count the cost of the computers because that's part of the fun, and usually someone else is paying for the electricity, maybe parents, a school, or workplace. So the mined coins are free money, and if they lose them, they can just jump onto the next alt coin bandwagon. And selling some coins to some old guy with real money is just gravy, or used to buy even more expensive equipment for the next round of play.
Just like baking your own bread, it's really not cost-effective, but that really doesn't matter too much, because they would still be buying expensive computer rigs and playing games, so this is just a real-world game where they have a chance to make some real cash. It's not surprising that the high-power video cards that are usually used for mining are the same cards needed by high-end gaming machines.
The rest of the talk, for example about using Bitcoin instead of Visa, is just blowing smoke to fool the parents into believing there is some real purpose to the whole enterprise.
You need to do just a touch more reseach on this. You incorrect in about 70% of what you are saying. You are entirely correct to say that a lot of the power behind bitcoin is in fact geeks with free access to electricity , but there is now also hundreDs of millions being ploughed into bitcoin development through VC channels building new apps , payment processing systems and incresing the bandwidth and user availability of the network. This is still really early days , and yes , bitcoin will be a serious contender to VISA etc because VISA are locked into using collapsing fiat currency models which they have absolutely no control over.
Bonus all their CEOs in Bitcoin. They're begging to learn the hard way.
The guy in the background has to wear a face mask because he can't stand the smell of shitcoin.
Is that another Alt-Coin ? Where can the sourcecode be downloaded ?
Hey you retarded hippies, remember how you protested email too? You're now using a 'virtual' mail system.
Read and weep peasants. You guys were all born to be followers. Thank God for people like me, the great Kim Jong Un.
http://techcrunch.com/2014/02/28/whats-not-being-said-about-bitcoin/
These dumbasses think that web pages are printed paper you can actually hold in your hand with a robot arm flicking through a filing cabinet full of them and bringing them up to a window on the front of their computer when they press a button - remember - if you cannot hold it in your hand it aint real.
"If you can't hold it in your hand it ain't real"
Like the money in your bank account? or maybe the message you just typed? Or the order you place at Amazon.com? Or the email you send to your mistress? Or the phone call you placed to your gay lover?
Correct. None of those things are real. You're absolutely correct. Is your real name Krugman by chance?
My web server comprises of 50,000 filing cabinets full of printed web page documents. Each time I access a page a robot arm selects the correct page and places it in my window. My data is 'real' because I can hold each page in my hand 'to feel' that it is real. Same as my money , if is not in paper notes or coins , then it is not real. The numbers in my bank account are just a hallucination , until I take the paper out of the machine that is and I can feel that it is real. I suggest that until you get the entire web and every email and skype in printed form , it is not real , it is 'fake' , and you are hallucinating.
Fortress Investment Group? Owners of Nationstar Mortgage, LLC? FUCK YOU, you predatory pricks. You will suffer for the damage you are creating all over America. Fucking worst "servicer". Just in the business to steal homes. Again...FUCK YOU.
You are being investigated for financial crimes but you already know that...
TSA Harasses Traveler After 'Seeing Bitcoin' In His Bag
Hey phoneystar. Where's your shitcoins? Maybe he can use his paper "key" as kindling when the other ponzi crashes and bricks of currency are used to heat homes.