At 0.02 cents, the humble satoshi still has a long way to go to hit parity with the cent, let alone an entire dollar.
Bitcoin (BTC) may be circling all-time highs, but a new storm is brewing around its smallest subunit, the satoshi or “sat.”
As more first-time investors pile in to BTC, attention is once again highlighting the fact that many still think Bitcoin cannot be divided and is “too expensive.”
Buy Bitcoin? Too expensiveA frequent point of debate throughout Bitcoin’s recent history, the problem of how to solve this misconception and introduce sats to a wider audience is now back in the spotlight.
This week, statistician Willy Woo publicly approached listings site CoinGecko with an appeal to make the tiny satoshi more visible.
“Put up a smaller unit as the default on BTC on your site and see if it catches on. Let’s start a trend,” he offered.
Woo was responding to an experience from Magic Internet Money podcast host Brad Mills, who had been told by a prospective buyer that they could not afford an entire Bitcoin.
A long way to parity?Satoshis are the smallest original subunit of Bitcoin, which is divisible by up to eight decimal places. At current prices, this makes a single satoshi worth around 0.02 cents. One dollar is worth 43 sats.
A dedicated resource now shows how much BTC/USD must gain in order for the one sat to equal one cent. For this to happen, Bitcoin would need to challenge the United States’ M2 money supply cap, Woo said — Bitcoin would need to hit $1 million.
Bitcoin money supply measured in U.S. dollar equivalent value. Source: WoobullAgainst that backdrop, a $23,000 Bitcoin price still seems modest. Nonetheless, some currencies have already fallen to satoshi parity of their own accord. In July, the Argentinian peso joined the Lebanese lira in seeing one sat equal their smallest unit of account.
He further noted that beyond sats, so-called “millisats,” which exist on the Lightning Network, could be used should the need arise. Lightning remains the most widely-accepted best bet for Bitcoin scaling, and advances in its user experience will allow entry-level Bitcoiners to send tiny payments for next to no fees in the future.
This is achieved by performing transactions off-chain and syncing them later, avoiding the need for miner fees and congesting the Bitcoin blockchain.
New York (CNN Business)Bitcoin has blown past the $20,000 mark and continues to hit record highs as investors flock to the cryptocurrency during the coronavirus pandemic.
After topping the symbolic benchmark Wednesday, bitcoin continued to surge late into the evening. It was last trading at roughly $21,851, according to data provider Refinitiv.
Bitcoin (XBT) has been on a tear this year, having tripled in value. It and other cryptocurrencies have been attractive to investors as the US dollar has weakened.
"It's not a surprise to us that Bitcoin has hit $20K but it is a very symbolic threshold to reach at the end of what has been a historic year for bitcoin," said Michael Sonnenshein, managing director of Grayscale Investments. "These are just the early days, and we think there's a lot more runway to go."
With the Federal Reserve expected to leave interest rates near zero for several more years, bitcoin may continue to win new fans.Well-known names are adding to bitcoin's mainstream appeal. A top executive at BlackRock (BLK) has even said the cryptocurrency can replace gold, and payments giants Square (SQ) and PayPal (PYPL) have both embraced bitcoin.
"Volumes last week were 70% above the year daily average ... suggesting greater participation in this rally than has historically been the case," said James Butterfill, investment strategist at CoinShares. "It is worth taking note that investors are beginning to see bitcoin as a viable gold alternative."
Over the weekend, seemingly for no real reason, Bitcoin took off sharply and started rising towards $9,000 after struggling to break through and stay above $8,000 in recent days and weeks.
However, preceding this, a Twitter account known as ‘Whale Alert’ started picking up some major movement on the Bitcoin network as a cumulation of about 9 transactions saw 27,029 BTC worth $236 million get moved.
Mostly the moves were between wallets, but one of the transfers was onto an exchange, which gives some interesting insight into what those with a lot of money are thinking at the moment. It also could once again show just how easy it is to manipulate the Bitcoin market with enough capital.
These nine transactions saw a huge amount of money moved in a short period of time, and because of their timing, it would be plausible to tie this market movement to the rise in price of the major cryptocurrency.
One massive Bitcoin holder in particular moved 15,000 BTC worth more than $119 million in a single transfer from one unknown wallet to another.
In those transactions, one of them saw 1,500 BTC moved onto Bitfinex. While it is unclear the reason for taking these funds onto an exchange, it could be very likely that the owner is looking to sell while the prices are again rising for the major cryptocurrency.
If these transactions across the wallets and onto an exchange had enough power to see the entire Bitcoin market – and its related cryptocurrency market – shift by as much as it did, it is actually quite concerning.
Regulators such as the SEC and others have noted that they are skeptical of the cryptocurrency space as it is still so nascent and new, and thus susceptible to market manipulation. This may not be malicious market manipulation, but, if nine transfers can cause a spike of nearly 10 percent, it is a big red flag.
Despite what the whales are doing, it is is noteworthy to see that these kinds of movements from big money movers are causing people to get excited rather than fearful. There has been an entire change in the market sentiment wherein that if that had happened at the peak of the bear market, it could well have caused a sell off.
Bitcoin rose above the $8,000 mark on Tuesday, extending a rally that has seen the digital currency more than double in value since the start of the year.
According to data posted on the website CoinDesk, bitcoin topped $8,325 before giving up some of its gains. Since the start of the year, bitcoin’s value has increased more than 120%.
Bitcoin prices have yet to recover to its all-time highs of around $20,000 in late 2017 when a frenzy of interest from retail investors suddenly sent the value of cryptocurrencies dramatically higher.
Andy Brenner at National Alliance Securities said while it wasn’t possible to confirm who is behind the direct flows of who is buying bitcoin, it looked logical that Chinese investors were using the digital currency as a means to diversify.
“We can see that the bid for bitcoin in this latest run has coincided with a big down tick in the value of the Chinese yuan versus the dollar,” he said Monday in an email to CNBC.
“Negative news is no longer having a negative impact,” Iqbal V. Gandham, UK Managing Director at online trading firm eToro told CNBC by phone Tuesday.
Gandham said the bitcoin price has now hit a base value and now individual stories such as Samsung and HTC phones carrying bitcoin or Amazon marketplaces accepting the digital currency is starting to take effect on consumer acceptance.
Gandham added that rumors that Fidelity Investments, one of the largest asset managers in the world, will soon start crypto trading for institutional customers was also having a postive impact on price.
Meanwhile, digital currency critic David Gerard is ascribing bitcoin’s recent run to trading moves by big holders of the digital currency who are putting the squeeze on short sellers.
In a blog post Monday, Gerard said “Whales” are buying up the market until short positions get forced out. At liquidation, short sellers then buy back at market price forcing a price spike as a wave of buying hits order books at the same time.
Gerard said the whales who guided the price higher then sell off at a profit.
The crypto specialist also linked the rise in bitcoin to an influx of dollar-substitute tokens called “tethers,” which have supposedly been introduced into the digital market to inject liquidity. Tether is owned and run by the same people as crypto exchange Bitfinex.
However major questions exist over how realistically the value of a tether can be linked back to an actual dollar and Bitfinex is being investigated by the New York Attorney General.
Gerard said despite the big questions over the validity of the recent buying spree, he expected bitcoin and other cryptocurrencies to keep going up.
“Mainstream media coverage might lure fresh suckers in with actual cash money, not just tethers. I predicted there would be another mainstream crypto bubble — but I didn’t expect it this soon.”
Bitcoin pulled back to the ‘no-trade zone’ or ‘resistance zone’ as seemed to have pulled back from the break-away from the ascending triangle on 22nd April 2019 above $5600. While most traders believe with high probabilistic certainty that the ‘bottom is in’, the bears and bulls still seem to be in a tussle.
The price of Bitcoin 12: 30 hours UTC on 25th April 2019 is $5494. It is trading 0.37% higher on a daily scale.
The Bear Argument
Tone Vays still suggests that the bullish move at the beginning of the month is a bull trap and the bear market isn’t over. On the weekly chart, he mentioned that
“we were not able to hold the (200-Day) moving average. Hence, the consolidation continues between the 200-Day and 50-Day moving average.”
According to the 4-hour chart and 12-hour chart, Vays suggested that sequential candlestick principals pointed towards an obvious pullback. He expects “A short term correction most likely leading to a long term correction…”
Bulls Maintain their Conviction As well
While Tone Vays belonged to the class of bears, bulls like B.Biddles haven’t changed their perception either. According to a recent tweet by B.Biddles,
“$BTC Okay, checking in on the ascending triangle… Looks like we closed above it, then retraced back into the resistance range. Not seeing anything to do here. Still holding my long w/ avg. entry $5212.”
BTC/USD 1-Day Chart (Pull Back to the no-trade zone)
Moreover, BTC seemed to pull back to the parallel channel above $5000 and $5450 leaving the traders uncertain. B.Biddles, however, stands with his earlier analysis of the BARR (Bump and Run Reversal) bottom pattern which suggests we have entered the Run side. Further, the principals of BARR align with the ‘back and fill trading‘ mentioned by Bitcoin [BTC] futures trader Jeff Kiburg.
Therefore, the expectations of the market still seem to be split between the bull and the bear. Reportedly, the volume of Bitcoin Futures on CME is considerable which will expire for the month on Friday, 26th April 2019. Hence, it might have a huge effect on the price as the shorts will probably close to a net loss.
Do you think the rally will continue or the bears are right? Please share your views with us.
Bitcoin appears on track to end April on a positive note for the fourth consecutive year. The cryptocurrency is currently up 27 percent on a month-to-date basis.
Increasing that monthly gain look unlikely, as the bulls will likely have a hard time forcing a convincing break above multiple resistance levels lined up in $5,200–$5,300 range.
Prices may fall back below $5,100 in the next few hours, as the hourly chart relative strength index (RSI) has diverged in favor of the bears.
Bitcoin (BTC) looks set to end April in the green for the fourth consecutive year, having confirmed a longer-term bull breakout earlier this month.
The world’s largest cryptocurrency by market capitalization is currently trading at $5,200 on Bitstamp, representing a 27 percent gain on the month’s opening price of $4,092. BTC previously rallied 8, 26, and 33 percent in the fourth month of 2016, 2017 and 2018, respectively.
The sharp rise seen this month seems to have put the bulls in a commanding position for a long haul. The cryptocurrency has violated the most basic of all bearish technical patterns – the lower highs, lower lows – with a convincing move above $4,236.
Prices have also found acceptance above the 200-day moving average (MA), currently at $4,520, for the first time since March 2018, a sign of a bull market.
These gains look sustainable, too, courtesy of a sharp rise in trading volumes. For instance, 24-hour trading volume across all exchanges jumped to a 15-month high of $22.89 billion on April 3 – the day BTC solidified the bull breakout with a move above $5,000.
As a result, a drop all the way back to the monthly opening price of $4,092 on or before April 30 looks unlikely.
Bitcoin has posted April gains in five out of the last seven years.
The cryptocurrency gained 45 percent in the fourth month of 2013, its biggest April gain on record.
That record will likely stay intact, as BTC may have a tough time finding acceptance above multiple key resistance levels lined up above $5,200 in the short-run.
Monthly and weekly charts
As seen above (left), the 21-month exponential moving average (EMA) served as strong support in five months to October 2018. Further, a downside break of the line in November was followed by a sell-off to lows near $3,100 by December.
As a result, the 21-month EMA, currently at $5,237, is the level to beat for the bulls. Forcing a break higher, however, could be a tough task with short-term technical indicators reporting overbought conditions.
Other bearish technical lines located near the 21-month EMA could also keep the gains under check. For instance, the descending (still bearish) 10-month and 50-week MAs are located at $5,180 and $5,546, respectively. While the three-day chart’s 100-candle MA, currently at $5,239, is also proving a tough nut to crack, as discussed yesterday.
Usually, such a strong band of key resistance lines is breached after multiple attempts. So, the probability of BTC extending gains before the month end appears low.
In fact, the cryptocurrency may end the current month with lesser gains if the price finds acceptance below the crucial support at $4,912.
BTC closed at $5,190 on April 3, confirming a falling channel breakout on the weekly chart. A similar looking pattern in 2015 paved way for a three-year bull run.
So far, however, the follow-through to that longer-term bullish breakout has been discouraging.
Notably, the cryptocurrency witnessed two-way business last week before ending on a flat note. The resulting doji candle is indicative of indecision among the bulls.
That buyer exhaustion would gain credence, inviting stronger selling pressure, if the cryptocurrency closes (UTC) below $4,912 (doji’s low) this Sunday. A bearish close, if confirmed, could yield a deeper pullback to levels below $4,600.
As for today, BTC may fall back to levels below $5,100, according to shorter-duration technical charts.
An hourly close below the channel support, currently at $5,200 would validate the bearish divergence of the relative strength index (RSI) and fuel a drop to $5,100 and below.
The bearish divergence of the RSI would be invalidated if the price finds acceptance above the upper edge of the channel, currently at $5,250.
I always write about this basic idea when it comes to any investing: which way is the market going, up or down?
If you know, you are in great shape; if you don’t, you should not be playing at all.
This is the question on bitcoin.
All last year I was saying, “It’s going down, hopefully to about $2,500.” It hit the low $3,000s.
Now bitcoin is going up and I will be saying “It’s going up.” I think it will hit $6,000 soon and go on to $10,000.
At $10,000 I will look to recalibrate.
For now the crypto winter is over.
Here is the chart:
This is a simple chart with some guidelines and there is a clear pathway upwards.
There is apparently a lot of China interest in crypto right now, with tether selling at a premium. This makes sense if the market considers a yuan dollar depreciation on the cards. Tether has been shown to be resilient, even if it is still a controversial coin. It remains a good place to stash capital from short-term moves, be that from bitcoin volatility or ‘fiat’ privations.
Money flowing into stablecoins is going to lift bitcoin because fundamentally money flowing into crypto is what sustains and raises prices.
Bitcoin and altcoins have to have positive money flow because they are "mined" and have their monetary bases expanded with every block. For bitcoin $9 million of new money must enter every day to match new supply. It's not that straight forward because if miners hodl on to some or all of their bitcoin, less money needs to enter on a daily basis to prop up the price. In the end, however, supply and demand creates the price and for new supply to be matched at current levels, more than $3.3 billion dollars has to flow into bitcoin to make it go up.
That might seem a lot but it is not when you see the scale of modern markets. Gold production is $140 billion, so that’s the amount of fiat that most come into the system to keep its price around $1,300 an ounce.
Both assets have about the same emission as a percentage; the difference being the market cap of gold is about $5 trillion and bitcoin is $0.09 trillion.
Gold is the global asset to hedge against risk and investors are incredibly interested in it. It is a mainstream asset dwarfing equities and other assets in the mind of the man in the street as an "investment."
When you drill down into mindshare, when you look at interest in the financial news, you can see what looks like bitcoin eating into the interest in gold, at least in the U.S.
If you look at the global picture this trend can’t be seen as clearly and when you appreciate global interest in gold is driven by countries with low tech penetration it suggests that as time passes, bitcoin and crypto will increasingly share the flight capital/risk asset crown with gold.
Even if bitcoin takes 20% of that market, bitcoin will be through its previous $20,000 high. That is without bitcoin continuing to be used for transactions or any other emergent use case or situation.
Bitcoin winter is over, the price is going up, the only question is how high. For now $6,000 is an easy target and $10,000 a coin this year is not such a hard target. I’m still accumulating.
The Bottom Might Just Be In, Trader Suggests
As much as bears like to harangue that Bitcoin (BTC) has yet to bottom yet, more and more analysts are convinced that there is a high likelihood that the collapse to $3,100 might have been it for this cycle.
Jonny Moe, a well-followed trader and technical analyst in the crypto industry, recently touched on why this is the case, explaining this theory in a three-part Twitter thread that broke down this topic to the nitty-gritty. Jonny, who sports a following of over 15,000, explained that Bitcoin is about to see its first bullish 20-day and 200-day simple moving average (MA) cross since October 2015, which came as this budding market began its recovery to eventual new all-time highs.
While there isn’t an actual term for this crossover, Jonny, among other analysts, see this as a fact that Bitcoin has broken past resistance, and has a solid amount of potential to rally higher, rather than pullback drastically off highs. As the analyst explains: the 20-200 crossover is “a slightly faster version of the famous golden cross, typically 50-200.”
Interestingly, the bonafide golden cross, while not active yet, will come to fruition in the coming weeks, barring that Bitcoin and other cryptocurrencies keep up their current bullish momentum. And that, my friends, is why Jonny is coming increasing convinced that “it’s certainly shaping up [that the bottom being in] could be a real possibility.”
Jonny Moe isn’t the first to have popularized the theory that December’s collapse was the “worst comes to worst” moment of the current cycle, far from.
More On Why Bitcoin Bottoming At $3,100 “Makes Sense”
As reported by Ethereum World News previously, Josh Rager, a team member at crypto exchange startup Level, recently claimed that after some thinking about Bitcoin’s potential bottom, $3,100 might have been it “for two reasons.”
He looks to the fact that retail investors had many buy orders in the $1,800 to $3,000 range, especially due to analysts calling for further lows as an indicator that $3,100 may have been the bottom. This, of course, is in reference to the theory that going against the crowd in markets often proves better than going with it. (Arguably, the tables have turned though, as by and large, crypto’s biggest names are extremely, even overly bullish, meaning that this theory sets a precedent for an impending collapse.)
The second theory that Rager drew attention to is the fact that $3,100 is a very attractive investment point for institutional players and high net-worth individuals, making it less than likely that Bitcoin could fall under that region. This, of course, is postulation, but theory does make sense, especially considering that volumes on the CME’s Bitcoin futures contract have been breaching all-time highs, even in this bear market.
Investors, traders, and speculators are jumping into the Bitcoin and cryptocurrency markets again, sending prices soaring across the board.
Over the last seven days, Bitcoin has gained 25.74%, Ethereum 18.76%, Ripple 16.12%, and Litecoin 53.20%--see table 1. The rally was extended across the cryptocurrency markets, with 94 out of the top 100 cryptocurrencies gaining in price-see table 2.
7d Price Change For Major Cryptocurrencies
Source: Coinmarketcap.com 4/7/19 at 11 a.m.
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Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks
Cryptocurrencies Advance/Decline Number
Source: Coinmarketcap.com 4/7/19 at 11 a.m
The recent Bitcoin rally has left left stocks, bonds, and the yellow metal in the dust, so far, in 2019-see chart.
Bitcoin Beats Stocks, Bonds, and Gold YTD KOYFIN
What could explain the rally?
Several factors. One of them is the renewed interest by big money. “The recent surge in Bitcoin has been sparked by a large buy order – rumored to be around $100 million – that sent BTC straight through technical resistance ($4,235) that had been in place since the start of December 2018,” says Nicholas Cawley from the DailyFX team.” “The lack of volatility in Bitcoin over the last few weeks has kept prices in-check, and low volume markets are always more susceptible to sharp moves than more liquid markets.”
Kirill Bensonoff, a technology advisor, agrees. “The surge was obviously fueled by a very large order, in the tens of millions of dollars,” says Bensonoff. “This is another sign that institutional players are coming into the market.”
Then there’s the prospect of lower interest rates, which turns risk on again for all sorts of speculative investments.
And there are the “market technicals.” Market volumes are up 3 to 4 times normal turnover, exacerbating the sharp rally,” observes Cawley. “In addition to the clean break of resistance, the move also broke through the 200-day moving average around $4,650 with ease, enabling the rally to continue.”
How far will the rally go? Will Bitcoin ever reach the $20,000 mark again? It all depends on whether regulators will approve financial instruments that allow for broad investor participation in the cryptocurrency markets, like Electronically Trading Funds (ETFs), according to Bensonoff. “For Bitcoin to hit $20,000 in 2019, we would need a major catalyst, and I believe the only one with this much force would be ETF approval,” says Bensonoff. “Without it, we are looking at a $10,000 best case scenario.”
While it’s unclear whether which of the two scenarios will come true, one thing is clear: volatility will continue in the cryptocurrency markets, creating new winners and losers.
[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don't own any Bitcoin.]
No one seems to know what to do about bitcoin.
Since its genesis, regulators and courts around the world have struggled with whether to and how to regulate it. Depending on where you are in the United States, for instance, it either is or is not illegal to sell your bitcoin for cash without a state license. That’s because depending on where you are, bitcoin is either money or it isn’t, and selling bitcoin is either money transmission or it’s not.
And in some places, it may be, but no one has decided. So, you need a license to sell your bitcoin… unless you don’t.
As a first-generation member of the rapidly emerging crypto legal community, I have seen how regulatory inconsistencies increase the cost of innovation and drive businesses from jurisdictions that lack clear guidance or take a hostile view of the blockchain and virtual currency industry. Following the Third District Court of Appeal’s Florida v. Espinoza decision, Florida now does both.
As explained below, this is due to a widespread and fundamental misunderstanding of the very nature of bitcoin.
Espinoza says bitcoin is a payment instrument
The recent appellate opinion decided that selling bitcoin requires a Florida money service business license, overruling the trial court’s order that dismissed criminal charges against Mitchell Espinoza who was alleged to be operating an unlicensed money service business by selling bitcoin.
The trial court dismissed the charges, concluding that bitcoin was not a “payment instrument” under Florida law, and that selling bitcoin was not money transmission. The Third District disagreed with both of these conclusions, holding that bitcoin is a “payment instrument” because the Court had evidence that individuals were willing to accept bitcoin in exchange for goods and services.
The Court cited no technical authorities regarding the development, uses or structure of Bitcoin for non-financial purposes, but instead focused on the fact that Bitcoin could be used as a means to convey value.
The Court compared the language of Florida’s Money Transmitter Act (Ch. 560, Fla. Stat.) to that of the federal law and, based on its reading of the plain text of Florida’s law found that it did not expressly require that a third party be included in a transaction for that transaction to constitute money transmission.
Accordingly, the Court found, selling one’s own bitcoin constitutes “money transmission,” which requires a license, a written compliance protocol, and extensive record keeping. Not only is this decision at odds with the Federal view of what constitutes a money service business, it also contradicts guidance from the state regulator, Florida’s Office of Financial Regulation, which stated in a declaratory statement in re: Cryptobase that parties who buy and sell their own bitcoin do not need to obtain a money transmission license.
It also demonstrates a fundamental misunderstanding of what Bitcoin is and how it is developing into a robust network supporting a variety of use cases, including non-financial uses.
Bitcoin is not money. It does money
Bitcoin lacks several fundamental characteristics that we recognize as required for something to be “money.” It is not centrally backed or technically fungible. Despite this (and likely because the word “coin” appears in its name), it is often described as “digital money” or “digital gold.”
In actuality, Bitcoin is neither of these things. It is a worldwide global network of computers that allows participants to
authenticate data without first obtaining permission from a centralized authority. The first application of that network just happens to be something like money.
The global network is called Bitcoin with a capital “B” and the public ledger that records and validates data entries on the network is called the Bitcoin blockchain. Prior to Bitcoin, secure peer-to-peer electronic transactions of data were impossible because digital information is easy to copy; digital representations of value could be copied and spent twice. Bitcoin solves this issue by using cryptographic tools, in a game theory based system that incentivizes participants that invest computational energy to validate new data by paying a reward for this work.
That internal network reward mechanism is confusingly called bitcoin (with a lower-case “b.”) Without bitcoins to incentivize mining, Satoshi’s network could not work. First, because users who wish to add or change data tracked on Bitcoin’s blockchain need to pay fees in bitcoin, there is a cost to add new data and therefore the Bitcoin network is unlikely to be flooded with phony or low- value transactions (essentially preventing a denial of service type attack).
Second, because miners that invest their resources to validate changes to the blockchain must be trusted to act honestly, and not certify false data, the bitcoin reward provides a monetary incentive to participants to only accept valid transactions.
The Third District’s decision and what Florida should do about It
The Third District’s opinion focuses exclusively on bitcoin’s financial uses. However, their analysis ignores other uses of the Bitcoin network, including as a censorship-resistant publication network, a time-stamping tool, a document authenticator, a smart contract platform (using RSK Rootstock) with broad application across many industries, and the ability to facilitate forms of micro-communications (utilizing Bitcoin’s lightning network) that are not otherwise technologically possible.
Each of these non-financial uses requires a user to easily obtain bitcoin to participate in both the financial and non-financial activities facilitated by the Bitcoin network.
By ignoring the State’s existing policy of permitting individuals to sell their digital property without obtaining a money services business license, the Court has transformed Florida from one of the more innovation-friendly states for the blockchain and virtual currency industry into one of the least. By not recognizing the value and developing uses of the Bitcoin network, the Court essentially made it cost-preclusive to start a business that helps to grow or facilitate the still-developing uses of Bitcoin’s global decentralized network and created higher burdens for parties who wish to transact on the Bitcoin network.
The State’s desire to prevent unlawful behavior is well founded, but it should be overly cautious when endorsing overbroad or technologically restrictive policies. The Third District Court of Appeal’s decision is at odds with Florida’s Office of Financial Regulation and its proper understanding of the many aspects — both non-financial and financial — of the Bitcoin network. Fortunately, a new bill has been introduced before the Florida House that would form a working group to advise the State, among other things, of how to regulate bitcoin. However, a legislative solution may take months or years.
In the meantime, it is imperative that regulators and courts take the time to understand the Bitcoin network’s applications beyond its use as value so they do not let Florida fall behind.