Well, Bitcoin is now down something like 9% from highs hit just a few days ago, underscoring just how volatile things are in the land of make-believe space tokens.
On Tuesday, Goldman was out reminding you that Bitcoin and cryptocurrencies in general are not “the new gold” and that comes just a week after UBS released a pretty lengthy note explaining that cryptocurrencies are not really “money” either.
And while there are all manner of reasons to be skeptical about Bitcoin – not the least of which is that it’s in a bubble the size of Donald trump’s ego – at the end of the day the concern is that governments are going to shut cryptocurrencies down or at least regulate them so heavily that they won’t be able to fulfill their “destiny.” That would be the first step to the end game, which is central banks creating their own versions and in the process relegating the rest of the field to the dustbin of history. This, in essence, is Jamie Dimon’s argument and as far as central banks getting into the game, don’t take my word for it, just ask the central bank for central banks – the B.I.S.
Ok, so that brings us to Wednesday and we’ve got a problem. Or actually I don’t, because I don’t own any make-believe space tokens. But if you do, you’ve got a problem and that problem is that the CFTC has released a new “primer” on virtual currencies which says this:
There is no inconsistency between the SEC’s analysis and the CFTC’s determination that virtual currencies are commodities and that virtual tokens may be commodities or derivatives contracts depending on the particular facts and circumstances.
So basically, ICOs may be regulated by the CFTC. That elicited a frowny emoji from the crypto crowd and Bitcoin fell nearly as 6%, its biggest loss in nearly a month.
Full CFTC deck embedded below.