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Predominant Perspectives on Bitcoin Investing

Bitcoin Investing

Bitcoin InvestingBitcoin, the humble little digital currency quietly introduced to the world in 2009, has proven to be the best performing asset on the planet over the past four years. (It seems as though the folks at Business Insider need to do a bit more due diligence before they post stories about the “best performing” investment)

Until recently, Bitcoin – and its investment performance – have been easily ignored by traditional investment media. Meanwhile, Bitcoin has continued to grow and blossom.

Mainstream financial press is silent no more.

Bitcoin has experienced raids, scandals, bad press, and a multitude of insults that would have killed it if it was just some passing fad.

Bitcoin has proven to be decidedly more than just a passing fad.

It is because of Bitcoin’s resiliency and tremendous demand growth that has caused the mainstream financial press to start covering it.

Somewhat surprisingly, the coverage hasn’t been entirely one-sided.

The following video was created and published by the New York Times and covers the story of “the online currency that has attracted a number of investors“:



For a more detailed examination of the factors to consider before you embark on Bitcoin investing, here is an excellent video from the Bitcoin 2013 conference sponsored by Bitcoin Foundation in San Jose, CA:



Lastly, here is an amazing story of a man who, while researching encryption for a thesis paper, discovered Bitcoin and allocated a mere $27 to invest in some Bitcoins. His tiny investment has grown to over $1 million worth of Bitcoin today (our guess is that you would never convince him that it’s a bad idea to buy and hold Bitcoins for investment):



Bitcoin Arbitrage Is No Easy Task

Bitcoin Arbitrage

Bitcoin ArbitrageWith Bitcoin being the leader of digital currencies, growing rapidly, experiencing raids and scandals, and benefiting from an large influx of investor money, the volatility is certainly present that typically offers a great profit potential for arbitrage, which is described by Wikipedia as, “the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.”

In theory, the opportunity for Bitcoin arbitrage seems extremely lucrative. The Bitcoin market is still in its infancy. Bitcoin is very, very, very far from being a mature market. As such, the Bitcoin exchange rate will vary widely from exchange to exchange.

For instance, at the time of this writing, here are the current price quotes for one Bitcoin from three different Bitcoin exchanges:

MtGox:  $266.90

Coinbase: $283.11

BTC-e: $256.49

These types of price variations are a traders dream come true and do not exist in more mature markets. However, Bitcoin being the Wild West type of market that it is, the price variations between exchanges is excessively large.

The opportunity for arbitrage seems too good to be true. One could simply buy 10 Bitcoins on BTC-e for a total of $2,564.90 and then immediately sell them at Coinbase for $2,831.10, for an instant arbitrage  profit of $266.20. Simply do this 4 times per day for a cool grand. Or better yet, what if you used a Bitcoin trading robot to do this many times per hour?

The profit potential would be in the tens of thousands of dollars per day…

So why aren’t savvy traders making millions via Bitcoin arbitrage?

The answer lies in the fact that the exchanges themselves are still very immature. On Wall Street stock exchanges, trades happen in millionths of a second. On Bitcoin exchanges, trades happen in days.

Getting back to the example above of buying 10 Bitcoins at BTC-e and selling them on Coinbase, while that can be done, you will not receive your proceeeds from the sale at Coinbase for several days.

And therein lies the hurdle to successful Bitcoin arbitrage. By the time your funds are received, the Bitcoin price could – and probably will – have moved significantly away from where it was when you initiated the trade.

While some people may see the reward as being worth the risk, with the price of Bitcoin rising so rapidly, magnificent profits can be had by simply buying some Bitcoin and riding the rapid climb in value.

The Price History of Bitcoin

Bitcoin Historical Prices

If you’re aware of the digital currency called Bitcoin, you’re probably also aware that it’s price has been steadily climbing over the past several months as it gains more widespread acceptance from the mainstream financial community.

What you may not be aware of is the remarkable price history that Bitcoin has racked up over the past few years since its launch in 2009.

Official exchange pricing of Bitcoin, depending upon which Bitcoin exchange you’re using, generally began in July of 2010. Bitcoin was first introduced into the world as a functioning digital currency in January of 2009, however, there were no Bitcoin exchanges at the time to convert Bitcoins into any of the government-issued currencies of the world. Any such transactions were done on a person-to-person, individual level. Records of such transactions are sparse.

So, with the records being what they are, we can still estimate the Bitcoin exchange rate for time frames prior to July of 2010.

Which brings us to the historical price of Bitcoin. Here is the Bitcoin price in U.S. Dollars on January 1 of each of the past 4 years (we’ve provided an estimate for the Bitcoin price on 1/1/2010 as there were no official exchange prices dating back that far):

January 1, 2010:  $0.01 (estimate)
January 1, 2011:  $0.29
January 1, 2012:  $4.70
January 1, 2013:  $13.55

Looking at the trend over these past few years of the historical increases in Bitcoin’s value, let’s average out the yearly gains and extrapolate a few years into the future using the already established price history of Bitcoin.

From 1/1/10 to 1/1/11 Bitcoin went up about 29 times in price. From 1/1/11 to 1/1/12 Bitcoin went up about 16 times in price. From 1/1/12 to 1/1/13 Bitcoin went up about 3 times in price.

The average of these three is 16. Using this information, we can project out a few years. Of course, as the old saying goes, past performance is no guarantee of future results. There is no guarantee that Bitcoin’s price will continue to rise at the same phenomenal rate that it has over the previous three years.

With that preface, here’s the projection for the next few years based upon an average yearly price increase of sixteen fold:

January 1, 2014:  $216.80
January 1, 2015:  $3,468.80
January 1, 2016:  $55,500.80
January 1, 2017:  $880,012.80

Bottom line: if Bitcoin’s price for the next 3 years continues to increase at roughly the same rate as the last 3 years, the price of each Bitcoin will be just over $880,000.00.

Those numbers might seem impossible, but consider the story of Kristoffer Koch.

You might want to buy a few Bitcoins at today’s prices, just in case history repeats itself.



Bitcoin Gambling Sites Gaining Popularity

As Bitcoin Gains Popularity, So Are BTC Gambling Sites

Bitcoin Gambling SitesAs Bitcoin continues to garner greater and greater acceptance, Bitcoin gambling sites are growing in popularity right along with it.

Whether it be sports betting, video poker, blackjack, roulette, craps, keno or slots, if it can be gambled upon in the real world, odds are high that it can be gambled upon online using the virtual digital currency.

For those who are fond of wagers and risk, here is a list of the top websites that provide gambling using Bitcoin (remember, we do not endorse nor make any claims to the legality of the conduct at the sites below. Readers must perform due diligence at any site they visit): “Welcome to SatoshiBet, the home of modern casino gaming. All of our games can be played for free, instantly in your browser and without any downloads necessary!

We are one of the most trusted online bitcoin casinos. All payments happen instantly and completely anonymous through Bitcoin. We developed a highly innovative feature called Provably Fair to guarantee you that every game you play is shuffled in a completely fair way and that we can proof this.” “Play games, win Bitcoins!” “Fast and anonymous registration. Fast deposits and withdrawals with a very low minimum! We offer excellent odds for all major sports. Win a digital pile of Bitcoins, fast and easy!” “A Bitcoin Casino is an online destination where you can use your Bitcoins to play in a Sportsbook or a full Casino. features a full Sportsbook and Casino.” “Bitcoin Video Casino is an online casino that exclusively uses the cryptocurrency Bitcoin. We are provably fair, offer anonymous and instant registration, and offer several popular games. Our game style is based off of the classic Video Poker machines in Las Vegas.

We offer the following advantages:

  • No registration
  • At least 99.5% expected return on all games
  • Instant payouts
  • Games are provably fair
  • Play Bitcoin Video Poker from anywhere”



Bitcoin ETF Gets Hot and Cold Response

The First Bitcoin ETF Filed with the SEC

The Winklevoss twins have filed with the SEC to get approval of the first Bitcoin ETF

The Winklevoss twins have filed with the SEC to get approval of the first Bitcoin ETF

It was only a matter of time before a Bitcoin investor filed for regulatory approval of a Bitcoin ETF. The Winklevoss twins were the first to do so.

Reaction in the mainstream press has been both warm and cold. An example of the former comes from the ETF Database which wrote:

“With over $1.5 trillion in assets and nearly 1,500 products, many thought that the ETF world had run out of original ideas or that it had reached its saturation point. But the beginning of July saw that theory once again shot down, as a filing rolled in for one of the more controversial ETF ideas for quite some time. The Winklevoss twins, famous for their role in creating Facebook (FB), have filed for a bitcoin product and have taken the financial world by storm.”

But not all the publicity has been favorable. Zerohedge contributed a chilling commentary that was anything but receptive:

“That a BitCoin-based ETF is a horrible idea for those who believe in what BitCoin stands for, i.e., a status-quo regime-remote monetary process which is naturally also independent of existing capital markets, is quite clear. Yet a BitCoin-based ETF prospectus, namely the Winklevoss BitCoin Trust, with a proposed offering of 1 million shares at a price of $20 each, is precisely what the Winklevi filed today with the SEC. We can only assume this idiotic idea is proposed simply to entice the habitual gambling momentum-chasers, who seek a conventional method of pursuing the momentous volatility that only Bitcoin can offer now that regular BitCoin exchanges are being shut down by the US and other governments, as absolutely nobody else would be interested. That, or just another expression of the identical twins’ megalomania who enjoy nothing more than seeing their name in lights or in the title of a security. Because once one reads the risk factors, among which we find the following, we doubt even said habitual gamblers will be interested: “It may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoins in one or more countries, and ownership of, holding or trading in Shares may also be considered illegal and subject to sanction.” Well, you have been warned.”

Our view here at Planet Bitcoin is that the ETF won’t be a wild success story, but neither will it be the dismal failure portrayed by Zerohedge.



Despite Bitcoin Scandals, The Virtual Currency Blossoms

Bitcoin Scandals Fail to Dampen Bitcoin’s Appeal

Bitcoin ScandalNational Geographic ran a fairly evenhanded story that pointed out that “Bitcoins may change the global economy.” The thrust of the story was that in spite of frequent Bitcoin scandals – the most recent being the shut down and seizure of Silk Road – the Bitcoin currency continues to “blossom.”

The story states, “After the feds seized and shuttered Silk Road, an online marketplace for illegal drugs, earlier this month, some technology experts started sounding the death knell for Bitcoin, Silk Road’s international currency of choice. Instead, we may soon see Bitcoin’s real value.

Invented in 2008, Bitcoin is not the first attempt at an all-digital, cryptographically based currency. Others have existed in one form or another for nearly fifty years, but have either failed to take off or dramatically crashed and burned. Bitcoin is the first cryptocurrency with the deep structure, wide adoption, and trading momentum to achieve escape velocity.

In practice, Bitcoin blends credit cards’ ease of digital transfer with the relative anonymity of a cash handoff. Like all currencies, the problems it poses are both practical and metaphysical; like cash or credit, Bitcoin is somehow both more and less real than the goods it is traded for.

Until now, the most well-known of these goods have been illegal drugs, like those on Silk Road. But the drug marketplace’s shutdown gives Bitcoin a chance to gain some much-needed legitimacy. “It’s a watershed moment for Bitcoin,” Marco Santori, the chairman of the regulatory-affairs committee of the Bitcoin Foundation, told The New Yorker. “Bitcoin’s PR problem, with which it has struggled for the last year or so, is being addressed in a very direct way.”

Bitcoin’s future potential was a hot topic this week at emTech, an MIT conference on emerging technologies. In a panel hosted by MIT Technology Review’s Tom Simonite, MIT economist David Johnson and BitPay CEO Stephen Pair discussed Bitcoin’s complex relationship with paper currencies, credit, and state authority.”



Bitcoin Raids Fail To Dampen Bitcoin Demand

Bitcoin Demand Continues to Grow In Spite of Bitcoin Raids

Bitcoin RaidThroughout 2013 there have been frequent raids on businesses that are aligned with Bitcoin. In spite of the onslaught of bad publicity, Bitcoin continues to gain favor – and demand – from the public at large.

The Washington Post featured a story recently that reports on the counter intuitive results these raids have had:

“In the first four months of 2013, Bitcoin saw a massive rally, rising from $13 at the start of the year to $266 on April 10. The price then crashed to $50 later in April, rose to $170, and fell below $65 in July.

But in the last three months, the price of Bitcoins has risen steadily. It hit $140 earlier today.

The currency’s value has risen despite a spate of negative headlines. Earlier this month the feds arrested the alleged mastermind of the Bitcoin-based narcotics marketplace Silk Road. In July, federal regulators shuttered an alleged Bitcoin Ponzi scheme. And the leading Bitcoin-based exchange, the Japan-based Mt. Gox, has had a series of problems, including a U.S. government crackdown and an acrimonious legal dispute with a former business partner.

But at the same time, entrepreneurs have been quietly building new businesses on top of the virtual currency. Few if any of those businesses have produced big profits yet. But the fact that so many entrepreneurs and investors are pouring resources into the system — despite its highly publicized problems — suggests a high degree of confidence that those problems will be worked out in the long run, and Bitcoin will become an important part of the world economy.”



Bitcoin – The Groundbreaking Digital Currency

The World’s Foremost Virtual Currency

Bitcoin is the world’s first and foremost purely digital currency. describes it this way:

“Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.”

Althought the video below is a couple months old, it makes the point that savvy professional investors are getting involved in the Bitcoin reformation.



Here’s a little bit of info from the video description: “The prospects for the alternative cyber-currency known as Bitcoin have brightened, with some serious financial players preparing to open it to investment. The Winklevoss twins, best known for suing Facebook’s founder Mark Zuckerburg over claims he stole their social network idea, are planning to float a Bitcoin trust. But even though the multi-millioniares are now going along with Bitcoin, the rebel currency still has a strong grasp over those drawn to its anti-establishment charm – as RT’s Marina Portnaya reports.”

Ready to get started? The first step is to create a Bitcoin wallet. Or, if you are a more sophisticated Bitcoin proponent, you might consider an automated Bitcoin trading robot.

Show Your Support for BTC with a Bitcoin Keychain

Help Promote BTC with a Bitcoin Keychain

Bitcoin KeychainIf you’re reading this page, you obviously have some level of interest in Bitcoin. Maybe you’ve already created a Bitcoin account and purchased a few Bitcoins as an investment. Maybe you are eagerly awaiting the day that Walmart begins to accept Bitcoins as a form of payment.

As you look forward to the day that each Bitcoin will be worth $1 million, why not show your support and help promote the crypto currency revolution with a Bitcoin keychain?

You can get a Bitcoin Keychain from Amazon and have it the next day.

Here are some of the features:

  • Brass-plated Bitcoin Keychains are a great conversation starter
  • Keep a solid metal coin-like Bitcoin Collectible with you at all times
  • As seen on,,
  • 1-3/8″ diameter (bigger than a 1-BTC Casascius Coin)
  • Makes a great gift for (and from) Bitcoin enthusiasts
  • Is a great conversation starter

As one reviewer on Amazon stated, “This is a pretty clear cut buy. It’s exactly what the picture shows. High in quality the only real downside here is amazon wouldn’t let me buy it in bitcoin!”

Neither Amazon nor Walmart are currently on the list of merchants who accept Bitcoin, but we sure are looking forward to the day when they get added to the list.

Bitcoin Investors Pouring Capital into Bitcoin Startups

Bitcoin investors are aiming to cash in on the explosive growth in the value of Bitcoin. Even the revered Wall Street Journal is reporting on the phenomenon:



About the topic of the video: “Bitcoin startups are beginning to raise sizable investment capital even as industry leaders warn that hackers are abusing the Internet virtual currency for profit.”

However, it’s not just venture capital firms that can cash in as Bitcoin investors. Even the average earner can create a Bitcoin account, buy some Bitcoin, and experience the rapid appreciation in the value of Bitcoin.