"It's In The Mania Phase": Securities Regulator Warns That "Mortgages Are Being Taken Out To Buy Bitcoin"

As the investing world continues to argue back and forth over whether Bitcoin is an acceptable store of value or nothing more than a massive bubble that has only been rivaled by the Dutch tulip mania of the 1600's, new information revealed by the President of the North American Securities Administrators Association would tend to lend some credence to the latter.

Appearing on Power Lunch today, Joseph Borg, also director of the Alabama Securities Commission, argued that Bitcoin has clearly entered its "mania phase" with people now taking out home equity loans and cash advances on credit cards to purchase the digital currency in the hopes of getting rich quick.

"We've seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.


"This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in."


"You're on this mania curve. At some point in time there's got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don't know," Borg said in an interview with "Power Lunch."

Of course, as we noted a few months ago, JP Morgan's Jamie Dimon has has been among the most vocal critics of Bitcoin and has frequently expressed his skepticism that international governments will allow it to survive in any meaningful capacity after someone inevitably "gets killed..."

Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”


“You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”


“Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

...perhaps the Americans now levering up their largest asset in the midst of yet another housing bubble, only to turn around and purchase what could very well end up being an even bigger bubble, are the people to whom Dimon was referring???


NoPension Laowei Gweilo Tue, 12/12/2017 - 05:43 Permalink

All these Bitcoin fans ripped me to shreds the other day, when I asked them to describe " Bitcoin for Dummies " to me.

My major point /question, to wit...... " who/what maintains the fiat reserves that you cash out with?"

I'm not talking about pulling out $10,000. I'm talking about $1million.

This is the answer, so far... $15-50,000 per month. ( depends on who you are).... Use BC to buy PMs from a participating dealer..( but I don't know those limits)
Seems it's a narrow hallway to the exit.

Maybe it won't happen...but if this starts to drop ( for whatever reason!), the rush to the exits will be fucking epic.

I'm sure there are those who plan on holding...eh..excuse hodling until the world paradigm shifts and catches up with the most brilliant masters of the universe Bitcoin brotherhood. Or put another way..."This time is different ".

Not technically adept enough, visionary enough, smart enough or lucky enough to have jumped in. I own exactly " zero" Bitcoin. And not jumping in now. So, I'll just watch. Try to learn. Stack, as usual...post snarky comments and troll.


Edit... Don't forget...Bitcoin is valued in Dollars!! That's gotta chafe your new paradigm ass! Haha!

In reply to by Laowei Gweilo

mtl4 NoPension Tue, 12/12/2017 - 08:23 Permalink

The key paradigm shift will be if/when the majority of all retailers (not just PM dealers) allow direct payment in Bitcoins then you don't need to change for cash before using (ie retailers provide the float in that scenario).........We still have a long way to go and I don't believe the gov't still has played all the aces up their sleeve yet either.  For instance you can't pay your taxes in Bitcoins nor have they tried to make it criminal to own (look at FACTA if you have any doubt how draconian it can get).  Bitcoin still hasn't scared them enough to take action but be careful because desperate gov't do very irrational things.  This is alot like a combination of the last 2 events (both a Dot Com mania mixed with a financial euphoria).  Yes, something will come of it in the end (just a few Dot Coms made it out of that era to later create some dramatic changes, look at the FANG stocks for example) but there will also be a major shaking of the tree before that can happen.

In reply to by NoPension

maxblockm NoPension Tue, 12/12/2017 - 22:43 Permalink

I can pull out 50k per day, and I'm a nobody.50k/month? Those people just need to ask to have their limits raised, or you got your info wrong.Interesting question if there is a limit on BTC transactions for metals dealers. I doubt it though. I'm sure they have no problem at all accepting an unlimited amount of non-refundable currency.Even if it were only $25k per dealer, you could still move $250k in under an hour with ten dealers. And these guys don't even blink at $25k orders. https://goldsilver.com says they accept $100k per day, and also say they are planning on increasing that amount.If ever dealer accepts only $100k, you can convert $1 million in an afternoon.Edit:Bullionstar - $3.6million (200BTC)/dayJMBullion - $100k/orderApmex - $250k/orderSilver.com - 100kProvident - 250k https://apmex.comhttps://jmbullion.comhttps://providentmetals.comhttps://moneymetals.comhttps://amagimetals.comhttps://schiffgold.comhttps://suissegold.comhttps://veldtgold.comhttps://bullionstar.comhttps://americanbullion.com  

In reply to by NoPension

dasein211 Tue, 12/12/2017 - 00:07 Permalink

Mania phase? You mean like institutional money is involved- it ain’t. Or like land titles are on the blockchain? They aren’t. Or stocks on the blockchain? Nope. We haven’t even started. Like all the underbanked are on? No. This isn’t totally global yet. What percentage of people even own ANY? Didn’t tulips have to be owned by everyone to be a bubble?

dasein211 aurum4040 Tue, 12/12/2017 - 00:15 Permalink

Maybe. There’s about 3-7,000,000 active wallets right now on the blockchain and multiple are owned by individuals (I have more than 1 for instance). That’s for the world. There are 147,000,000 wallet addresses with less than .001 BTC that are inactive. Those 147 mil wallets hold less than 1,000 BTC. Hardly anyone is involved yet.

In reply to by aurum4040

aurum4040 dasein211 Tue, 12/12/2017 - 00:30 Permalink

Long term, it matters. Short term, it doesnt. BTC is so overextended its unbelievable. ETH in the 02's? Where else is it going? Not lower which is why ETH broke out today. BTC wont move back up in earnest until ETH is in the 07's per BTC. Sell on the news is oldest rule in the book. Every trader is long BTC and short ETH. Until today. Today is day 1 of the ETH  up move and BTC correction. Extremely bearish on BTC short to medium term. At least 30% lower. At least. 

In reply to by dasein211

Global Douche dasein211 Tue, 12/12/2017 - 01:00 Permalink

However, you have to determine how many of those addresses are "change" addresses, those which are mixed with others in a collective wallet. (A "core" wallet on Bitcoin by default holds 100 addresses when first inaugurated) Each "change" address'es "input" is added to others in that wallet if a large-enough transaction is being made, thus several can be spent at once. It's also important to understand, the more of these smaller addresses which contain balances are combined into a bigger one, the more information the transaction must contain, thus a higher fee to be received by the miners. I consider this one of the biggest headaches about Bitcoin, at least for now before Lightning Network gets going.

In reply to by dasein211

Golden Phoenix MayIMommaDogFa… Tue, 12/12/2017 - 04:57 Permalink

Bitcoin has had inherent smart contract capabilities from inception. Existing Bitcoin smart contracts such as Multisig and Timelock power the Lightning system already in use on test systems. Existing BTC smart contract capability has been programming intensive but more user friendly smart contract implementations are coming both on and off chain. Some developers are focusing on side chain applications because this allows smart contracts that don't increase traffic on the main chain.An electronic kitties game recently occupied 20% of ETH network traffic clogging the main network with spam. If five such games were popular the ETH main network would be 100% full. Unlike ETH, Bitcoin sidechain applications could run a game of electronic kitties or even tens of thousands of different applications with nearly zero impact on the main chain. With that kind of capability Bitcoin could eclipse entire development platforms possibly even the internet itself. This is probably why, in BTC terms, ETH has crashed from .15 to .024 BTC in 5 months. Bitcoin is poised to be the death of ETH. Not to say the ETH network is incapable of making improvements as well. Free market competition has a way of pushing people to miraculous achievements.

In reply to by MayIMommaDogFa…

freak of nature Golden Phoenix Tue, 12/12/2017 - 05:37 Permalink

Miners solved the Cryptokitties issue for the short term, so it's no quite right to say 5 games would end eth. What's going to be intersting is who is first to the table to solve scaling. Whoever does that first, all others will have a tough time to catch up. I own most major players so I don't have to obsess so much or draw any religious loyalty. Just sit back and enjoy the show. Until the SEC shows up that is.Bonus links:Lightning for Bitcoin https://www.youtube.com/watch?v=a73Gz3Tvx3kRaiden for Ethereum https://www.youtube.com/watch?v=SNzc04wh7soThen you can look at your iota or raiblocks or whatever. Many actors working on the issue.

In reply to by Golden Phoenix

ebworthen Sabibaby Tue, 12/12/2017 - 01:56 Permalink

Solution not Bitcoin or other crypto, sadly.A real shame because I am behind it in spirit.Whenever I point out the obvious (bubble, on DARPA net, public ledger, Segwit2X, forks, branches, alternative Bitcoin types, alternative coins, currency of chioce for drug dealiers, ransomware spammers, hackers, money launder's, etc., etc., etc.) I am flamed for not understanding "math".No, I get it.  I also get that it wastes electricity, requires it, the Internet, and is immutably track-able, taxable, and fungible.  Get out while you can.

In reply to by Sabibaby

NoPension ebworthen Tue, 12/12/2017 - 05:55 Permalink

I'm going to make a prediction....

When Uncle Sam really gets his eagle feathers in a bunch...and decides he wants his " fair share " of the profits..( haha!, keep bragging kids!)..and it spooks ...say..10-15% to run for the door with their "windfall "....

....now, that will be a sight to behold.

He's already made his initial " polite " request.

In reply to by ebworthen

Global Douche Sebul Tue, 12/12/2017 - 00:51 Permalink

I'm a hold'ler and I won't "86" myself over a true Bitcoin cra$h to nothing. It's been the best learning experience for the money I've ever had and I'd sure as hell do it again! For now, I'm still gonna hodl as I roll the bones going forward in time.If every kid had the opportunity to learn what I did during the Blizzards of 2009/2010 mining it in Iowa, then Spring/Summer 2013 with Gox after buying BTC with part of my tax refund, they'd have lost plenty of sleep and seen things they'll never forget. They'd also experience the mental orgasm of actually spending some of that, either for services or products, or as I did for one homeless shelter in Pensacola, FL anonymously. The speed and ease of transmission without needing my bank's or state's permission (or being taxed or nickled to death) for doing so is so liberating!

In reply to by Sebul