27 Dec 2013 / CNBC – While there were plenty of other big surprises in 2013, no business story likely was more unique than bitcoin, the online simulated currency that threatened to shake up the global monetary system.
Debate raged over bitcoin’s legitimacy: Was it just a playful creation of hobbyists, or a new exchange medium brought about as a logical reaction to profligate currency manipulation from the world’s central banks?
Nick Colas, chief market strategist at ConvergEx, was one of the early Wall Street analysts to take a serious look at bitcoin back in February. To wrap up 2013, he examined what he sees as 11 myths surrounding the subject.
1. Bitcoin is huge
For all the talk and hype, bitcoin is tiny with a total value of just $10.8 billion. That compares to the total stock of U.S. dollar at $800 billion, Colas said in a report. There’s also about $4 trillion in global currency traded every day.
2. Bitcoin enables drugs and terrorism
Colas argues that bitcoin is “way too volatile” for the average drug dealer or terrorist. That’s not to say that “some enterprising dealers” don’t use it, but if it was widespread Colas contends its value would be “$10,000 or higher” compared to Friday morning’s trading value of about $800….. Read more
