Coinbase has launched Coinbase Exchange, and the Winklevoss brothers believe that Bitcoin is going to be worth $1 trillion. Here are the cryptocurrency highlights of week 5:
- On Monday Bitcoin start-up Coinbase launched what it called “the first regulated exchange in the U.S.” In the announcement, the company states that the goal is “to bring increased stability to the bitcoin ecosystem.” Sadly, Coinbase Exchange is available in just 24 states, hence the service has not yet been reviewed by Digiconomist.
- Despite a positive week last week, the price of Bitcoin has started to decline again this week. The digital currency lost about six percent of its value in one weeks’ time. Interestingly, the price initially surged to more than $300 per coin during the week following the launch of Coinbase exchange. Afterward, Bitcoin experienced a crash in which it lost over 25 percent of its value to about $227 per coin currently.
- Despite Coinbase’s regulatory claims with regard to its new exchange, the exchange does not seem to be as regulated as Coinbase apparently suggests. The exchange is available in California and New York, but regulators from both states have spoken out against Coinbase’s claims. New York still has to release the final version of its BitLicense regulation, meaning that it is impossible for the company to be licensed in New York. Similarly, Bitcoin still exists in a regulatory “grey zone” in California.
- Regardless of Bitcoin’s plunge, the Winklevoss brother still believe that the digital currency will one day have a total market capitalization of $1 trillion. Tyler Winklevoss stated that “if Bitcoin is a better gold or seen as a type of gold-like asset, then it could be in the trillions on a market cap”. The brothers are still in the process of launching their own Bitcoin exchange and an exchange-traded fund (ETF) holding Bitcoins.
- Fraudulent services remain a big problem to the Bitcoin ecosystem. According to new cyber-security research from Southern Methodist University “fraudulent schemes have scammed at least $11 million in these virtual deposits from customers over the past four years”. The research is limited to just several scam types, and Cloud Mining scams such as those covered in the fraud risk assessments by Digiconomist do not seem to be included. Nevertheless, it does show the importance of warning against any potential scam.