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Thread: Bitcoin trading

  1. #1
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    Bitcoin trading

    Bitcoins are apparently gaining acceptance and reached USD1000 in late 2013. So, how about algo-trading this new world?

  2. #2
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    I've started looking at bit coins.... As if regular FX isn't challenging enough. So, I've registered with https://icbit.se. I wonder if anyone else in the TG community has any experience with bit coins?

  3. #3
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    "ICBIT currently is in process of incorporating in an offshore jurisdiction. If you are a lawyer willing to help us - please let us know, we need your help." - Doesn't inspire a vast amount of confidence in "the exchange"!
    Reality is merely an illusion, albeit a very persistent one - Albert Einstein

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    I'm inclined to agree! Reading the unofficial FAQ also makes me wary. Nonetheless, the bit coin currency presents an interesting new entity within the context of fx. Whilst there are sure to be scams, are there also 'real' (rather than random) opportunities for profit?

  5. #5
    Administrator Jim's Avatar
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    Here's what the European Banking Authority said recently:

    The EBA has identified several characteristics and risks that you should be aware of when buying, holding, or trading virtual currencies.

    • You may lose your money on the exchange platform
    • Your money may be stolen from your digital wallet
    • If you lose the key or password to your digital wallet, your virtual currency may be lost forever
    • You are not protected when using virtual currencies as a means of payment
    • The value of your virtual currency can change quickly, and could even drop to zero
    • Transactions in virtual currency may be misused for criminal activities, including money laundering
    • You may be subject to tax liabilities


    and here's what OANDA said earlier in the year:

    Despite the increased awareness around the cyber currency, OANDA has no plans at this time to introduce Bitcoin as a tradeable currency to OANDA’s fxTrade platform, or to accept Bitcoin as a method for funding fxTrade accounts.
    If you did manage to show a profit on paper "live trading" bitcoin, how would you spend it?
    Reality is merely an illusion, albeit a very persistent one - Albert Einstein

  6. #6
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    If you did manage to show a profit on paper "live trading" bitcoin, how would you spend it?
    Good question, perhaps on a house in Canada? But, presumably that's the real point of having an exchange - to swap the bit coins for something that my local Aston Martin garage will accept...

    It's clear that bitcoin trading potentially has many risks, but there is something interesting about the unknown nature of it also... perhaps the value with dive, perhaps it is some vast scam, perhaps it will be stolen and perhaps it lacks the protection afforded by using conventional currencies. However, many of these risks also exist with established currencies. However, perhaps the advantages of using established conventional currencies has led to more efficient markets. Despite the potential risks, could the bitcoin market be less efficient and consequently offer greater opportunity for profit?

    If the answer is a definite no - then I can't think of a good reason to take on the additional risk. However, if profit opportunities are more abundant, then perhaps it is worth a punt!

    I don't have any answers - but it's yet another interesting field to add to the ever growing list of things to keep an eye on!!

    Happy new year,
    Pete

  7. #7
    Administrator Jim's Avatar
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    Or a car? A Tesla, not an Aston Martin or Lamborghini! How about a degree in digital currency?

    Perhaps I should have explained my point at greater length? I didn't actually mean "what would you spend it on?", but:

    1) Would you trust the nascent "brokers" and "exchanges" to deliver your dollars or Bitcoins on demand, assuming you managed to successfully "buy the dip", or even short ?

    2) Would you trust the likes of SnapCard to deliver the goods (if you're a consumer), or BitPay to deliver the dollars (if you're a business)

    If you did manage to accumulate some, by fair means or foul, Paul Krugman thinks "Bitcoin is evil"!

    To be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why Bitcoin should be a stable store of value.
    Having now done a bit of research into the topic it seems like the most cunning plan is in fact to take lots of advance orders for ASIC Bitcoin "miners" and then fail to deliver them!
    Reality is merely an illusion, albeit a very persistent one - Albert Einstein

  8. #8
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    Quote Originally Posted by Jim View Post
    Having now done a bit of research into the topic it seems like the most cunning plan is in fact to take lots of advance orders for ASIC Bitcoin "miners" and then fail to deliver them!
    Agreed! I did read a somewhat cynical article (unfortunately I haven't found it again!) in which the author argued that by the time an individual finally does take delivery of their ASIC miner, it is unlikely to ever pay for itself.

    There's also a response to Krugman's article here. Emperor's new clothes syndrome?
    Last edited by Dr_T; 01-13-2014 at 09:29 AM.

  9. #9
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    In the latest news, eToro now offers Bitcoin CFDs, and it sounds like UFXMarkets will do soon. Plus500 now offer Litecoin CFDs also.

    Also a long bitcoin article in Bloomberg Businessweek: The Bitcoin-Mining Arms Race Heats Up

    No news on how to make a fortune from trading them though!
    Reality is merely an illusion, albeit a very persistent one - Albert Einstein

  10. #10
    Administrator Jim's Avatar
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    More interesting bitcoin news, after a fashion. I noticed a few new symbols on my LMAX demo account this morning - BTC/USD, BTC/GBP and BTC/USD. However LMAX assure me they are merely exploring the idea, and they currently have no plans to add those symbols to their live feed.
    Reality is merely an illusion, albeit a very persistent one - Albert Einstein

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