Brokers Minutes

Professor Kevin Dowd is Still Skeptical about Bitcoin




When Professor Kevin Dowd, a professor of Economics and Finance at Durham University, wrote a piece titled “Bitcoin is bust: Why investors should abandon the doomed cryptocurrency,” a lot of debate took place whether this libertarian and fierce advocate of private money over government-issued and controlled alternatives was right.

However, those who opposed him have not been able to convince him that Bitcoin is a complete private currency. Professor Kevin Dowd had argued that the role of miners reintroduces trust into the system putting it at risk of monopolistic practices and economies of scale. Nonetheless, he recognizes the frailties of Bitcoin in its current form.
He says that Bitcoin is a continuing evolution to be endangering its innovative principles. Answering to the question whether he considers Bitcoin as private money, he says that it has certainly been private (up to now) but Bitcoin does not satisfy all the classical features of money that can place it as complete private money.

According to Professor Kevin Dowd Bitcoin is a means of payment but does not function too well as a store of value, and definitely not a universally accepted medium of exchange. At the same time he makes it clear that on balance, he would be happy to regard it as private money wouldn’t want to argue the toss on mostly semantic issues.

BitLicense are Kiss of Death as They Defeat the Whole Purpose of Bitcoin

He says that Bitcoin itself proves that the notion of money is evolving, as it should and according to him he likes the fact that Bitcoin is a privately issued and a (mostly, still) unregulated currency. However, he thinks it is losing its key attractions: its decentralization, its anonymity, and its freedom from regulation.

Nonetheless, he admits that he has tried to address these issues in his papers, presentations and blog postings. However, the hard questions for Bitcoiners like are these key attractions, Bitcoin’s value proposition, intact and likely to remain so? And if not, why continue to use it? etc. have been put by him as well.

Regarding the regulations i.e. BitLicense in NY, he says that these are a kiss of death as according to him once the government gets users in its snare in such matters, there is no escape. Also, he believes that Bitcoin going mainstream (i.e., in the regulatory sense) kills the whole point of it.


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Warren Buffet, the Oracle of Omaha Suggests Investors to Stay Away from Bitcoin in 2015



The globally renowned investor, Warren Buffet who is also called ‘Oracle of Omaha’ for right predictions regarding investment opportunities, has suggested the investors to stay away from Bitcoin in the year 2015. He says, “Stay away from it. It’s a mirage, basically. … It’s a method of transmitting money.”
He further says, “It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it.”

According to the legendary venture capitalist, “I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.” Nonetheless, given Buffett’s almost wholesale aversion to tech, this one isn’t a surprising for a lot of observers.

Those who know Warren Buffet admit that the Oracle refuses to invest in what he doesn’t know, and he doesn’t know the technology sector, IBM notwithstanding. However, they have fundamental flaw in their understanding of Buffet’s understanding about the investment in Bitcoin, per se as here it is fundamental understanding.

Antipathy towards Bitcoin for Obvious Reasons

Buffett’s problem with Bitcoin is not that it is a tech investment; rather, it is that it is not any kind of investment at all as according to him it doesn’t have value. Earlier, in March this year in a TV show with CNBC he had explained Bitcoin as something that does not have value. Observation is that he invests mostly in the fiat system.

For instance, his investments are in insurance companies, banks like Bank of America, Goldman Sachs, SunTrust Banks, U.S. Bancorp, Wells Fargo, American Express, M&T Bank, GEICO, Applied Underwriters, General Re, Kansas Bankers Surety Company, National Indemnity Company, United States Liability Insurance Group, etc.

Thus, a general trend is that he invests the companies or sectors that he knows about; in fact, he has made big profits off the bailouts, Quantitative Easing, Bitcoin was created in response to. A lot of observers believe that Warren Buffer is perhaps unaware of the potential of Bitcoin or it is just a conflict of interest that forces him to talk against the digital currency.



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Bitcoin and Litecoin – Double Bottoms vs. Bearish Outlooks

By Forexminute - Fan Yang | Bitcoin, Litecoin | Dec 28, 2014 8:08PM GMT




Bitcoin and Litecoin have been bearish in 2014, but has been choppy and more or less trading sideways since October. Both virtual currencies then started to look bearish again around late November. Let’s take a look at the charts to assess their technical conditions.
Bitcoin continues to be bearish in December making new lows on the month over the weekend, just above 307. The 1H chart shows the market rebounding from around 307 to about 317. This rally put price at the 50-hour and 100-hour SMAs, which are so far acting like resistance.

316-317 is also a support/resistance pivot area, and if bitcoin is bearish, price should start falling. Now, some chartists might see a double bottom forming, or even completed. This is technically true, but if price falls back below 312, it is likely a false double bottom, an simply a near-term flat consolidation. The market is therefore still bearish, with 307 and the 285 low on the year in sight.

Only a hold above 312 and a rally above 318 should suggest bullish correction. The bullish outlook should be limited to around 325 at the moment, where there could be resistance due to a falling speedline.

Litecoin (LTCUSD) 1H Chart 12/28


Litecoin has also been bearish in December, but has flattened out while bitcoin continued lower. Since Christmas, litecoin has be trading above 2.63, but found resistance at 2.80. As we get ready for another week, it has respected the Christmas-support again.

This initial rebound on Sunday could be an early sign that a double bottom might form. However, as long as price is under 2.75, the market should remain bearish. In fact if the market is indeed still bearish, we should see resistance around the 2.70-2.72 support/resistance pivot area, which is also where the 100-, and 50-hour SMAs reside.
With the bearish outlook still dominant, price remains pressured toward 2.63, then the 2.21 low on the year. A break above 2.80 however could signal a short to medium-term consolidation/ bullish correction.


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Singapore to Organize the First Major Cryptocurrency Conference & Expo the Next Month

By Forexminute - Deepak Tiwari | Bitcoin | Dec 29, 2014 10:09PM GMT




Singapore is going to be in news for the country is going to organize the first major cryptocurrency event. Nonetheless, continuing the largest Bitcoin event worldwide, Inside Bitcoin is headed to Singapore on January 29-30, 2015. The organizers of the event are inviting the participating parties and even offering discounts for early birds.

The organizers of Cryptocurrency Conference and Expo are asking the interested parties to join them at the Suntec Singapore Convention & Exhibition Centre for two days of conference sessions and exhibit hall access on January 29-30. Renowned entities from the Bitcoin ecosystem are expected to participate in the event.

The official website of the event says that during the two-day event, attendees will hear top thought leaders analyze the first digital, decentralized; peer-to-peer based global currency. Also, session topics will cover the implications of Bitcoin, investing and startup strategies, current mining challenges, international compliance, mass adoption, and what lies ahead.

Nonetheless, the organizers of the event have made sure that whether participants are new to cryptocurrency or are a Bitcoin expert, they all can register for Inside Bitcoin Singapore and see how this exciting protocol is spurring a global payment revolution. The people who will attend the event will be able to gather information and interact with Bitcoin stalwarts.

Some Major Issues to Be Discussed

A range of topics have been included for discussion at the event. For instance, the panelists will be talking about Blockchain Technology Compliance and Regulation; Derivatives and Arbitrage; Financial Privacy; Bitcoin in Asia; Advanced Payment Solutions; Altcoins and Complimentary Currencies; Intermarket Analysis and Valuation, etc. amongst others will be discussed.

Registrations are open for all those who wish to participate in the two-day event. According to the organizers the event is quite useful for anyone with a vested interest in Bitcoin and other virtual currencies, including of Developers; Entrepreneurs; Financial professionals; Private equity, corporate, angel and venture capital investors.

Apart from them Banks and financial institutions; Brick-and-mortar merchants and online retailers; Credit and loyalty solution providers; Consultants; Daily deal and group buying networks; Data and payment processors; Legal professionals; Security solution providers; *Founders of early stage and emerging growth companies too can register.

As the early registrants are going to get discounted tickets, those who are hurrying up will save a lot of money; therefore, anyone interested to save money should register now.

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The Bitcoin Foundation Should be Destroyed Says Cody Wilson

By Forexminute - Deepak Tiwari | Bitcoin | Dec 30, 2014 9:07PM GMT




Cody Rutledge Wilson, an American crypto-anarchist, free-market anarchist, and gun-rights activist, says that the Bitcoin Foundation should be destroyed. Earlier this year he had announced in an interview that he would stand for election to a seat on the Board of Directors of the Bitcoin Foundation.

However, surprisingly, unlike other board members who are there at the post to promote Bitcoin, Cody Wilson had said that his aim was to destroy the Foundation. He had said that he wanted to run on a platform of the complete dissolution of the Bitcoin Foundation and begin and end every single one of my public statements with that message.

In his blog post Cody Wilson says that this Bitcoin Foundation works to provide the moral foundation for state action against Bitcoin and its apologists’ proliferating canards aren’t just the justification of the state-form in thought, but the State’s literal and active manifestation. He gives several reasons behind his dislike of the Bitcoin Foundation.

Will Wrestle the Foundation to Its Suicide

According to Cody Wilson for the State is not just institutional, it is imminent in thought – it guides, even determines thought’s possibilities. Elaborating further, he says that he will wrestle the Foundation to its suicide. He says that articles of Dissolution, the press, Daddy State and his AG, he will use any tool necessary to destroy the Bitcoin Foundation.

Nonetheless, he is quite open about his dislike of the Bitcoin Foundation when he says that though it is already wholly discredited, its death will make an inexpiable breach. According to him unpardonable too, since it will be an action against the orthodoxy of value – the only thing these banal Bitcoiners and legitimists seem to understand.

Bitcoin Foundation Was Always an Embarrassing Exercise in Bad Faith

His dislike for the Bitcoin Foundation can be understood from the lines, “This Bitcoin Foundation was always an embarrassing exercise in bad faith and state philosophy. It was always a vessel for frauds and second-rate minds to collude against the public. I invite you now to its ritual sacrifice.”

However, he makes it clear that his words should not be mistaken as part of some centralization controversy as he is not complaining that the Foundation is corrupt, superfluous, or has undue development influence. He says that he is willing to be realistic and admit the original intentions of the organization’s founders.


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BitQuick to Implement P2SH Multi-Signature Escrow Addresses




Becoming the first major Bitcoin trading marketplace to implement P2SH Multi-Signature Escrow Addresses, BitQuick is a peer-to-peer Bitcoin trading platform. In the press release the organization announces that it connects buyers and sellers; however, its integration of P2SH (Pay To Script Hash) multi-signature addresses through the BitGo platform is on offer.

The company says that it is now the first major marketplace to implement multi-signature technology to protect customer funds which has long been an issue. Earlier in February this year, the company became the first marketplace to provide public proof of reserves. Now, they have also created an updated proof of reserves page.

Nonetheless, BitQuick believes that with these changes it will be able to provide greater privacy for sellers, while still making the funds listed for sale publicly audit-able. BitGo on the other hand launched the first ever multi-signature Bitcoin wallet in 2013; however, it provides its clients with 3 keys.

Out of the three keys from BitGo, two of the keys, the user key-pair and the backup-key pair, are held by BitQuick, and one key is held by BitGo. Nonetheless, in its press release the company makes it clear that the backup-key pair is stored in a secure offline location and can be used for fund recovery in the case of a BitGo service failure.

Clarifying further BitQuick says that to perform a transaction from a secure address, 2-factor authentication must be performed and other levels of automatic fraud detection must be passed. Similarly, according to the company this allows it to provide the advantages of cold storage level security while also maintaining the convenience of quick transactions.


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Bitcoin Gets Approval from California Governor




The governor of the US state of California has approved Bitcoin; thus, the digital currency can now be accepted and used for transactions in the US state. This has been made possible by the ratification of a new finance bill which has made it possible for users to pay in Bitcoin. Earlier, only US Dollars were officially recognized.

However, now that the new bill allows for the use of other national and digital currencies, Bitcoin users in the state of California consider it a progressive step. According to the local reports among several new legislation coming into force for 2015 in California, the bill AB129 passed by Governor Jerry Brown in mid-2014 is one important one.

The bill according to the local media aims at ending a prohibition against using any alternative to US dollars for commerce in the state. Nonetheless, the bill also recognizes and permits the use of alternate currencies for transactions; thus, there is ample scope for digital currencies such as Bitcoin, Litecoin and others that have come up in the last couple of years.

California is Bitcoin-friendly States in the US

Though there are not many restrictions in the US on Bitcoin, the state of California has emerged as a Bitcoin-friendly state in the nation. This newly accepting stance makes it one of the more Bitcoin friendly states in a country where political opinion about the rise of digital currencies is heavily polarized; particularly, when New York is trying to regulate it.

According to some observers the decision by the state has not surprised them as California has long been one of the new technology centers of the US. Therefore, it is perhaps unsurprising that state of California is making headlines about leading the charge of Bitcoin acceptance in the country. This according to them was on the way and was just a matter of time.

Nonetheless, the Silicon Valley area boasts 32 venture-capital-backed Bitcoin companies, more than the rest of the country put together. In fact, state residents topped the chart for Googling “Bitcoin” more than any other state in 2014. Thus, the place where Bitcoin gained traction the most is California and legislators are just respecting the popular sentiment.

The local businesses that have embraced Bitcoin admit that as it has now been given the status of “legal money” a lot of new businesses and outlets will be encouraged to accept it. This will further encourage people to know about Bitcoin and its potential. It may soon emerge as a right alternative for dollar as well.


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Gold and Silver has been consolidating since the week of Christmas. As we begin the first full trading week of 2015, we can assess the price action in the past couple of weeks and they suggest further downside risk in the previous metals.

Gold (XAU/USD) 4H Chart 1/15


False Breakout: In December, price retreated from 1238.25 to 1170.60. We can see the falling channel in the 4H chart, which was broken at the end of the year. However, this bullish breakout failed to sustain and price retreated from 1210 and is now starting the week below 1200.

Bearish Outlook: Now, direction is very unclear because price action has been messy within a consolidation mode. However, the fact that gold*had a failed bullish attempt above 1200 can be a sign that bears are still in charge. A break back below the common support around 1180 should put pressure back on the 1170 low, with pressure of further downside risk towards the 2014-lows in the 1130-1140 area.

Above 1200: A rally back above 1200 might invalidate the bearish clue given by false bullish attempt, bringing gold back to square 1 in terms of building directional clues.

Silver (XAG/USD) 4H Chart 1/5


False Breakout: Silver had similar price action in December, retreating from 17.32 to 15.53, then trading sideways since mid-December. The 4H chart shows the range-bound price action finally broken to the upside last week.
However, price failed to sustain the breakout and came back down to test the range low at the end of last week.
A false breakout like is often a sign of pending bearish attempt. The fact that price bounced up but found resistance at 16.00 also suggests bears are in charge.

Bearish Outlook: For silver, a break below 15.50, with the 4H RSI dipping back below 40 should open up the 2014 lows in the 14.40-14.75 area.

16.00: If price starts to trading above 16.00 and closes above it this week, the current bearish bias would be invalid, and we are back to square one in collecting directional clues.


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Following are the major Bitcoin news of the day

BitStamp Acknowledges Problems with Its Hot Wallets
BitStamp today mailed his customers to inform them about a persisting issue in their platform, saying that their transaction server is detecting problems with their hot wallet, as a result of which they cannot process withdrawal requests. The Slovenia-based exchange further asked users not to get involved in any inbound or outbound transactions, until the problem is fixed. No coins were stolen, assured BitStamp. You can read the full report here.

Californian Governor Approves Bitcoin for Transactional Purposes

Following ratification in one finance bill, the State of California is now a place where Bitcoin and other cryptocurrency can be used freely as a method of payment. The old bill approved only US Dollar as a mode of transaction, but is now amended particularly to allow other national and digital currencies. You can read the full report here.

New Study Shows Concerns about Increasing Bitcoin Mining Centralization

A new study, titled ‘When Mining Pools Run Dry’, shows concerns about the increasing Bitcoin mining centralization, which ultimately puts power in the hands of a small number of corporate entities to control and drive the cryptocurrency markets. Not only such practices go completely against the concept of decentralization, but also attract the chances of 51% attack. You can read the full report here.



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The cryptocurrency market have a little upward movement in both Bitcoin and Litecoin charts. On the other hand, Bitcoin exchange BitStamp has confirmed that their hot wallets was indeed hacked, which ultimately cost them $5m worth Bitcoins. It somewhat explains the reasons behind the recent $70 crash in Bitcoin-USD market.

BTC/USD 4H BitFinex Chart


The bulls and bears are indeed battling with each around the 275-support level. The BTC/USD previously found its bottom around 255 – the 2013’s highest high between April and November, and reversed its prevailing downtrend towards north. For now, the price is literally trying to pass above the 275-mark in order to establish a near-term bullish trend towards the next upside risk around 300-304 area.

The BTC/USD currently is in a bearish bias, indicates the price which is below the 200-, 100- and 50-hours SMAs, with RSI staying around 39. It however has escaped from the oversold territory, thus reducing the bearish sentiment a little. However, a crash below the 255 mark will indeed inspire a false breakout towards the lowers 200s. Watch out for this support to decide on future trades.

LTC/USD 4H BTC-e Chart


The Litecoin market is tailing the Bitcoin’s price movements, and is right inside a bearish territory. The price, as you can see the charts, is way below the key SMAs and EMAs while the RSI is around 34 – right above the oversold line. At this point of time, the price really needs to cross above 2.11 – the 2014’s low – to establish a near-term bullish correction. If it does, then the upside risk will be towards 2.60-2.61 area.

However, in case price crashes below bottom 1.90 amid huge selling pressure, then the next bottom is surely to come around 1.50, psychologically.

Other Cryptocurrency

In over the last 24 hours, most of the altcoins have attained a little stability. While Darkcoin and Peercoin have fallen only by 0.5%, NXT has dropped around 1.5%. In the meantime, Dogecoin has surged by 1%.




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