Money in Cyberspace

One of the strangest investment vehicles ever designed is something called the Bitcoin, which is at once an exciting new technology for managing online transactions and an alternative currency to national currencies like the dollar, yen and euro. Last week, people who owned bitcoins discovered that electronic “coins” worth $1,350 were suddenly worth just under $945. Around the same time, U.S. regulators rejected an effort to create a bitcoin exchange-traded fund (ETF).

Bitcoins are “mined” electronically by computers as they solve complex algorithms, and they are recorded in a distributed “blockchain” network of “wallets” that are tracked on multiple computer devices everywhere in the world. Few retailers accept bitcoins, although it is reportedly the currency of choice for global arms dealers and illicit narcotics transactions, in large part because the transactions cannot be traced—or taxed. New cryptocurrency competitors like Ethereum, Dash and Monero have sprung up, vying for this small market, while a small group of bitcoin miners, known collective as AntPool, has seized control of the bitcoin network.

You can see from the chart of bitcoin prices since inception that this is not an “investment” for the faint-hearted, and there is some question whether the currency has a future outside of the small network of miners and shady dealers. If you’re approached to invest in bitcoins, run, don’t walk to the nearest exist!

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Empyrion Wealth Management (“Empyrion”) is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. Information pertaining to Empyrion’s advisory operations, services and fees is set forth in Empyrion’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at The views expressed by the author are the author’s alone and do not necessarily represent the views of Empyrion. The information contained in any third-party resource cited herein is not owned or controlled by Empyrion, and Empyrion does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Empyrion of the third party or any of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner or investment advisor.

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