Bitcoin hits record high above $1,200 on talk of ETF approval

Digital currency bitcoin jumped to a record high above $1,200 on Friday, as investors speculated the first bitcoin exchange-traded fund (ETF) to be issued in the United States is set to receive regulatory approval.

Traditional financial players have largely shunned the web-based "crytpocurrency", viewing it as too volatile, complicated and risky, and doubting its inherent value.

But bitcoin, invented in 2008, performed better than any other currency in every year since 2010 apart from 2014, when it was the worst-performing currency, and has added almost a quarter to its value so far this year.

It soared to as high as $1,200 per bitcoin in early Asian trading on Europe's Bitstamp exchange BTC=BTSP, before easing to about $1,190. reut.rs/2lR1Mqk

That put the total value of all bitcoins in circulation -- or the digital currency's "market cap", as it is known -- at close to $20 billion, around the same size as Iceland's economy.

Some analysts say regulatory approval of a bitcoin ETF would make the currency relatively attractive to the often more cautious institutional investor market. [nL8N1G85HI]

But despite potentially high returns, low correlations with other currencies and assets, falling volatility and increasing liquidity, there is scant evidence so far that most major players are considering investing in the digital currency.

"Bitcoin is just not liquid enough for us to even think about," said Paul Lambert, fund manager and head of currency investment at Insight, in London.

"We manage billions and billions of dollars – we'd need to be able to go into that market and trade in hundreds of millions of dollars at a time, and my sense is it's not like that."

Three ETFs that track the value of bitcoin have been filed with the U.S. Securities and Exchange Commission for approval.

The SEC will decide by March 11 whether to approve one filed almost four years ago by investors Cameron and Tyler Winklevoss. If approved, it would be the first bitcoin ETF issued and regulated by a U.S. entity.

Source: Reuters

Bitcoin trading shrivels under Chinese government's glare

Trading volumes at China's three largest bitcoin exchanges have plummeted after the central bank put the virtual currency market under sharper scrutiny a month ago in a move that coincided with official efforts to stem capital outflows.

China had been the world's leading venue for bitcoin trading, with analytics site Bitcoinity estimating that the OkCoin, Huobi and BTCC exchanges had accounted for more than 90 percent of the global bitcoin market on Jan. 11.

But data compiled by analytics platform Sosobtc showed the number of bitcoins traded on the three exchanges slumped from 13.6 million on Jan. 6 to just over 120,000 on Feb. 9.

The People's Bank of China launched checks into the three exchanges last month and they have responded by saying that they would improve their systems to prevent money laundering and the use of bitcoin to trade against the yuan.

On Thursday, the People's Bank of China said it had also warned smaller bitcoin exchanges that it would shut them down if they violated regulations.

While the yuan CNY=CFXS weakened 6.6 percent against the dollar last year, its worst performance since 1994, the bitcoin price BTC=BTSP has soared to near-record highs.

That, and the relative anonymity the digital currency offers, has prompted some market operators to believe bitcoin had become an attractive, if niche, option for tech-savvy Chinese to hedge against the yuan and skirt rules limiting how much foreign exchange individuals can buy each year.

The three main exchanges have introduced trading fees, stopped allowing margin lending and increased scrutiny of user identities, making it far less attractive for automated, high speed trades which had previously accounted for the lion's share of their business.

The absence of trading fees had provided an advantage over overseas rivals earlier, but that advantage has now gone, traders said.

Business has virtually dried up on Beijing-based high-speed bitcoin trading platform BotVS, according to chief executive Chen Zhenguo.

"With the transaction fees the profits you can get from hedging (Bitcoin) are too low...You might as well put your money in Yu'e Bao," he said, referring to a money market fund run by an Alibaba Group (BABA.N) affiliate.

Other traders voiced similar sentiments.

Cai Wenhao, business manager at Sosobtc, said trading volume levels in China would likely normalize to around those seen on exchanges elsewhere, like the Hong Kong-based Bitifinex and U.S.-based Coinbase.

Source: Reuters

Holanda prende suspeitos de usar bitcoin para lavar dinheiro

Dez homens suspeitos de usar a moeda virtual bitcoin para lavar até 20 milhões de euros de dinheiro ganho com tráfico de drogas online foram presos na Holanda, disseram promotores holandeses nesta quarta-feira.

Os homens, descritos como jovens de cerca de 20 anos e com nacionalidade holandesa, foram presos na terça-feira em operações coordenadas em 15 localidades no país, disse a porta-voz do serviço de investigação fiscal do país.

Os promotores acreditam que os homens lavaram de 15 milhões a 20 milhões de euros de tráfico de drogas vendidas na chamada "Dark Web" - sites que são invisíveis para os mecanismos de buscas e que só podem ser acessados com o uso de softwares especializados.

O bitcoin é o pagamento preferido desses sites porque pode ser rapidamente transferido entre usuários em qualquer país sem usar um banco, tornando difícil rastreá-lo.

Fonte: Exame