UPDATED 11:46 EDT / APRIL 02 2012

NEWS

Bitcoin Draws the Attention of British Traders

Bitcoin is making the news again after British traders have gotten wind of the speculative potential of the currency and began to try their hand at buying into it like any other commodity market. The news comes via Reuters in an article on Business Insider and outlines a few of the ways the financial elite view the cryptocurrency—not always favorably—but in spite of these knocks on the coin in the past, it’s certainly continued to persist.

Banking and payment expert Simon Lelieveldt believes they are living on borrowed time.

“There is always a power base underlying a currency,” he said, speaking at the Digital Money Forum in London in March. “Bitcoin is not going to fly because there is no central bank or power base. It’s doomed to fail.”

But its separation from power is precisely what attracts many users.

“Bitcoin is not run by people with hot sexual appetites for hotel maids. It is not run by corporations. It is not governed by people with budgets to meet. It is governed by a mathematical formula,” one trader and Bitcoin enthusiast told Reuters over a pint of Guinness in London’s financial district.

The trader in question is a British financier who has been playing the game of Bitcoin for a while now and says that his colleagues have also gotten into the speculation game. Although many of them are looking at how their short term can be padded with the currency—he wants to peer into the long term. Hoping that eventually he’ll have a stake in a worldwide currency with an upper limit when it matures.

The best news bout this anonymous trader? Investment in Bitcoin startups:

“He and three other traders are currently seeking Bitcoin startups to invest in,” writes Buisness Insider, “adding he was hoping to put in $300,000 worth.”

Bitcoin has seen a bit of a rocky road with the initial hack of MtGox that nearly crashed the economy (and the subsequent need for the exchanges to grow up and learn better security.) We’ve seen the market expand out into different venues, accelerate the growth of exchanges, and reach out to Internet sellers and even brick-and-mortar stores to broaden its base. There’s even the potential for Bitcoin to become a secondary trading currency in countries like Africa that have unfit central banking opportunities.

With the attention of possible investment dollars and traders looking into the cryptocurrency, we could be peering into the next stage of the market’s maturity. For all the blows and rocky hardships, the sheer tenacity of the fans of the coin have kept it alive—and it’s an odd group—consisting of speculators, geeks, libertarians, and a diverse set of interests, it’s been amazing to watch it stay afloat.

With the addition of attention from financial professionals, and startup money, we might see the beginning of transaction networks that take advantage of Dwolla or payment-on-demand with a virtual currency. Bitcoin has shown so far that it’s also an excellent intermediate for people with different exchange rates to do currency.


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