Commodity Blog

Bitcoin is hovering just above $100 after a brief dip to $87 in intraday trading late last week. However, the price has fallen steadily since the end of May when revelations first began to surface about the NSA’s classified surveillance programs of telephone and internet metadata, which perhaps raised new fears around the currency’s pseudo-anonymity. Whatever the case, further doubts have arisen about global efforts to reign in digital economies. And as seems to accompany such news recently, technical outages have tended to exacerbate uncertainty whenever new fears abound, and Mt. Gox’s sockets are down once again this Monday.

In an article of the G8 Summit publication this month, John Lyons, chief executive of the Cyber Security Protection Alliance, called upon governments around the world to completely outlaw alternative payment mechanisms, such as Bitcoin. Lyons stated: “If treasuries and financial institutions around the world were to block those transactions and permit only legitimate currencies to be used on the internet through regulated payment service providers and cards (such as Visa, MasterCard and American Express), then the flow of many billions of dollars to criminal groups would be stemmed.”

The market capitalization of Bitcoin is again less than US$1 Billion in total. It is most widely owned by known internet entrepreneurs such as the Winkelvoss twins and presumably by like-minded individuals who are not likely using Bitcoin for criminal purposes, so the figure of “many billions” is probably overstated, if Bitcoin was meant to be the main target of his statement. Nonetheless, such fears tend to work their way around Bitcoin forums and may have increased selling of the currency over the past few weeks. Vigorous debate on the topic is certain to follow at the G8 summit in Northern Ireland on June 17th and 18th.

The G8 Summit publication can be found at: http://www.newsdeskmedia.com/files/G8-UK-2013.pdf.