Bitcoin news round-up 09.06.2014

3 minute read

Posted by: DeepDotWeb

June 10, 2014

Bitcoin’s price has dropped slightly this week after seeing exceptional gains of 30% last week following the bitcoin conference in Amsterdam and news that Apple’s app store would take a more lenient approach to allowing use of the virtual currency in apps. Bitcoin currently stands at $646.20, down slightly from $658.79 on Monday 2 June.

Despite last week’s solid growth that the currency was privy to – which was spurred on by institutional investors and early adopters upping their positions in the currency – bitcoin has suffered a number of policy setbacks this week; although not enough to scare investors away entirely. Fox News reported that the constricting range in the coin’s value could be pointing to a break out, potentially pushing it past the $700 mark

Industry news

Facebook has now accepted two digital currency tipping apps on the service. One is a dogecoin app, while the other is multi-currency. Facebook users are able to send coins or ‘tip’ digital currency to their friends, as Reddit users have been doing for some time. Facebook users will be able to tip currency to other users of the app without swapping wallet details. Both apps were made by the same development group, who said it will now “go back to finishing the universal platform to allow tipping on WordPress, Drupal, Joomla, Xenforo, PHPBB and a big etcetera” .

The amount of venture capital funds invested into bitcoin throughout 2014 so far is at $114 million, according to CoinBase statistics. That puts the (not quite) first half of 2014 way ahead of the full year amount of investment 2013 saw, which was $87.99 million. The rise is substantial, but is also telling that the biggest investors in the industry are holding off until the policy environment is more stable.

Bitcoin wallet and service provider Xapo will launch its bitcoin debit card later this month, it announced last week. The Xapo Debit functions like a traditional debit card, but allows customers to spend bitcoin at any online or offline merchant that accepts debit or credit cards. Xapo called the new card “a big step forward in the development of the bitcoin infrastructure”. After a customer makes a purchase, the bitcoin is converted into local currency. Xapo is backed by some big names in venture capital, including Fortress Investment Group, Benchmark, and Ribbit Capital.

US rapper 50 Cent announced he will accept bitcoin for his latest album, “Animal Ambition”. 50 Cent said he was making the move because he wants to stay with the times and that technology is changing business, and it is important to “stay with it”. “I take money no matter if its coins or dollars,” he said in a Reddit Ask Me Anything. Redditors joked that his next album will be titled “Get Rich or Die Mining”.

Policy and government moves

Swiss finance regulators dealt a blow to bitcoin this past week after the Swiss Financial Market Supervisory Authority requested Bitcoin Suisse AG, which operated bitcoin ATMs in Switzerland and Holland, to suspend its planned launch of ATMs in Zurich. The suspension is in place until “legal questions can be clarified” although it wasn’t clear what these questions are. Bitcoin Suisse said it intends to be back in action by June.

The US Securities and Exchange Commission (SEC) imposed fines on Erik Voorhees without first issuing guidance on whether he needed to register his ventures, which were raising bitcoins in exchange for shares. Voorhees had raised 50,000 bitcoins throughout 2012 and 2013 on public bitcoin forums, trading them for stakes in SatoshiDICE and FeedZeBirds. For the SEC to justify the case it would have to consider bitcoin as money; however the IRS declared the currency is not money, but rather property. With various regulators deciding on different definitions of the cryptocurrency, Voorhees had no way of knowing he needed to register with the regulator. Voorhees settled the case with the SEC for $50,000 without accepting or denying the charges.

One policy story that did reflect well on bitcoin was that the European Central Bank announced a negative interest rate for banks storing euros in central bank vaults. The news made bitcoin gain $15 whilst the price of euros and dollars on the FX market dropped one cent; although it gained it back later in the day. The move highlights the volatility of bitcoin, though also the lack of trust in the euro’s stability, Forbes reported.

Updated: 2014-06-10