PRZOOM - /newswire/ -
Beverly Hills, CA, United States, 2014/02/11 - According to CEO Peter Tasca of Laureate,” Bitcoin has survived two crashes, Bitcoin is stable and will continue to rise because Bitcoin has proven itself as an alternative currency with over 55,000 transactions daily” - LaureateTrust.com.
The value of Bitcoin (BTC), a virtual currency dropped on Feb. 7 when Mt. Gox announced that it was halting withdrawals due to increased traffic and a flaw in its protocol which can allow for fraud.
Mt. Gox said a “bug in the Bitcoin software” could allow transaction details to be altered.
Laureate reported, this was limited only to Mt. Gox, someone on their network could alter transaction details to make it appear a transfer of Bitcoins had not occurred. This could cause the transaction to be repeated therefore defrauding the sending party.
On the Mt. Gox index the digital currency dropped to as low as $500 early Monday, the freefall was more than 25% of value wiped out.
“This technical issue is of a much larger intensity than we’ve seen in the past,” said Sebastien Galy, currency strategist at Societe Generale in New York. “The market may be realizing that there are issues which are specific to these forms of currencies.”
Tasca states,“Mt. Gox did the right thing, it shows the integrity of Mt. Gox and the integrity of the self regulated BTC-e community to create a safe trading environment.”
Garrick Hileman, from the London School of Economics, who researches alternative currencies, said it was too early to tell how serious this was for Bitcoin users. “It’s a reason to be concerned, but it’s a little early to say that there’s something fundamentally flawed with Bitcoin software. Previous problems have been corrected,” he said.
Risto Pietila of Bitcointalk.org has estimated that half of the 11 million Bitcoins in circulation are controlled by 927 individuals.
Tasca states,“Bitcoin is a stable instrument for low cost transactions and it works well. There are currently over 21,000 merchants that accept the virtual currency and there are on average of 55,000 Bitcoin transactions per day.
Laureate BVI has advised their clients to purchase Bitcoin only as a highly speculative investment due to the amount of risk involved. The target price for Bitcoins in the next 12 months is $2,500.00 per coin based on the number of online retailers beginning to accept the currency and the limited supply.
According to Tasca,“You need to understand that Bitcoin has a floor at the $500 level. There have been 2 separate catastrophic events affecting this currency and none have been able to do sustainable damage. “ He further states,“What will increase the value of a Bitcoin is as more retailers sign-up to accept the currency there will be more Bitcoin Wallet operators such as Bitpay, Coinbase and Mt. Gox. As a trading vehicle this currency is infinitely divisible and as the transactions begin to reach millions there will be merchants that will hold Bitcoins as reserves. If you take a coin worth $600 and split it 20 ways you have each owner with $30 value. Now to get that owner to part with a fraction of their holdings you need to offer a premium and that is how you make money trading Bitcoins.”
Winklevoss Capital, headed by Cameron and Tyler Winklevoss, stated that Bitcoin could achieve a market value of $400 Billion.
Tasca states,“For sophisticated investors that understand risks of virtual currencies Bitcoin is a great trading vehicle because it is extremely volatile. For common investors it is not recommended they invest in Bitcoins without properly hedging their positions.”
Tasca warns,“Bitcoins were not created as a for profit investment vehicle, Bitcoins are meant to be spent. It was intended as a way to avoid the hefty currency conversion fees of banks and credit card processors.”
About Laureate Trust
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