With the FTX debacle, all the Bitcoin haters, like Charlie Munger (Warren Buffet’s partner at Berkshire Hathaway) and Jamie Dimon (CEO of JP Morgan Chase Bank) have all seized the moment and declared Bitcoin a fraud, a scam, and “AHA” that they were right to trash it in the first place. Bear in mind that they are traditional investors, and Bitcoin, the “new kid on the block”, is not traditional.
Bitcoin is still the “wild frontier” of modern finance, and is going through some growing pains as Bad Actors like the founder of FTX, Sam Bankman-Fried, are being extradited to the US to answer to the Congress and the SEC.
I put to you that the problem here is not Bitcoin, but the people who will take advantage of investors in their crypto-currency exchanges, just like there are criminal bankers and fund managers. The blockchain will have all of the transaction records, as it is designed, but the bad actors are using the unregulated ability to hide the non-blockchain transfer of assets from Crypto currencies to (Lord knows where) offshore accounts, donations to political parties to curry legislative favor, and more.
Clearly there is a need to regulate the behavior of crypto currency exchange managers, large investors, HODL’ers, and others who use international transfers and an egregious lack of transparency to hide their thievery and illegitimate profiteering. History shows us that the next Bernie Madoff is coming, and can bilk you with Bitcoin or conventional stocks and bonds.
While US investors may have some recourse when criminal activity is involved, this problem spans the world as Bitcoin and related Crypto currencies can be converted into almost any fiat currency. And then can be folded into conventional transactions to evade detection.
This is a dark time for Bitcoin and it’s advocates, who once extoled the low-fee transfer and blockchain-secure ledger that was the compelling reason to move assets into Bitcoin.
Any company planning large scale Blockchain projects may reconsider, until there is a governing body and real penalties for criminal behavior. Not to mention some transparency and adherence to GAAP. (Generally accepted accounting principles).
Personally, I don’t think Bitcoin is “going away” or “dead” yet – it just has not matured to the point where regulators know how to manage it’s risks and proponents; both legitimate and criminal.