logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Virtual Currency Plummets Following Fed Seizure of Black Market Website

  +Follow October 2, 2013 11:58AM
Share:
Tickers Mentioned:

The digital currency Bitcoin, which just yesterday came under intense scrutiny of banking regulators in New York, tanked in value following a massive government crackdown on an illegal marketplace that exclusively utilized the digital cryptocurrency.

The Silk Road, an online market where users could buy drugs, guns, and falsified identification documents using the anonymous Bitcoins, was shut down by the FBI and ICE on Oct 1, and its operator was arrested on federal narcotics charges.  

Ross William Ulbricht, known by his nom de plume “Dread Pirate Roberts,” had been running the illegal site since 2011, and had long avoided authorities by staying cloaked in the “Deep Web,” or anonymous underbelly of the internet, via safeguards and secret servers. While arresting Ulbricht and shutting down Silk Road, the government also seized 26,000 bitcoins from Ulbricht’s virtual wallet. This amounts to .002 percent of the total amount of bitcoins in circulation.

The total bitcoin market is worth approximately $16.4 billion.

Of more pressing issue than Ulbricht's bitcoin stash to the viability of bitcoins as a functioning currency was the amout of trade the Silk Road website provided. Authorities estimate that $1.2 billion in bitcoins traded hands on the site in the last two years.

While the digital currency has its roots in the internet black market, some on the fringes of Wall Street have begun to take it seriously, and made attempts to legitimize it. The Winklevoss twins of Facebook Inc. (FB) fame have referred to Bitcoins as “the internet of money,” and “gold 2.0” and have filed with the SEC to start a Bitcoin ETF.

But as the Ulbricht case has shown, the non-fiat currency is still extremely volatile. The currency swung wildly on Wednesday, losing a third of its value as users sold off bitcoins in a panic.

In August the Department of Homeland Security seized $5 million from bitcoin vault Mt. Gox, alleging the site was operating as a money transmitting company illegally without the regulations placed on companies like Western Union (WU)

Despite critics deriding the currency as reflecting a "sub-kindergarten-level monetary understanding" as Forbes contributor Nathan Lewis asserted, Bitcoin remains popular, and continues to entice investors.

Following the panic following Ulbricht’s arrest, the currency stabilized, regaining three-quarters of the value lost in the morning panic.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Signup for our daily newsletter and get our best articles emailed right to you!

Results for FB
BUZZ Just-In
27 Aug 14 23:28:22
You may be paying much higher spreads for US Tech Giants http://t.co/TPs272NYdZ $MSFT $TWTR $AAPL $FB $GOOG #spreadbetting #cfd
Lefendarty
27 Aug 14 23:22:02
RT @InvestorsLive: Please like and share this video lesson $FB and $TWTR https://t.co/HaQaFHeOWF $OIBR $ISNS $JRJC $ACHN $FNMA $VII
Market Monitor
27 Aug 14 23:19:40
$FB: [$$] CIO Journal. http://t.co/D3Fa5lozub http://t.co/tnSVQA2EzF
Fantastic fat guy
27 Aug 14 23:02:30
RT @jimcramer: Let it rest, than yes! RT @wkmoon30: @jimcramer got out of $FB after last earnings . Ready to get back in. Still room to ru…
Jason
27 Aug 14 22:48:13
Facebook Gets A Rare Downgrade $FB - I agree that the current valuation is not that expensive for a momentum stock http://t.co/5dMA1AFGvD
danielo
27 Aug 14 22:33:46
RT @sellhalf: $FB http://t.co/YTvMqVltlP
Stock_Markets
27 Aug 14 22:31:50
RT @Nobears_Nobulls: Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias h…
TheClosingBell
27 Aug 14 22:28:24
The Closing Bell is out! http://t.co/rQE910SvNL $EURUSD $GBPUSD $USDJPY $AUDUSD $SPY $TWTR $GPRO $YHOO $LNKD $FB $AAPL $BRD $CAT $WLT $LNKD
Stuart McMullin
27 Aug 14 22:25:56
RT @jasonclng: $FB If downgrading is the only way for the bearish guys to push down the price, it means the stock looks good fundamentally …
Stuart McMullin
27 Aug 14 22:25:34
RT @BrattleStCap: Seeing so many shitty TWTR ads and people bitching about them. Reminds me of when $FB first introduced ads. Aka: it's tim…
Business News Watch
27 Aug 14 22:19:36
$FB: [video] Chu's stocks on the move http://t.co/LVufMtjpyJ http://t.co/CStOkNgDF2
ajhit406
27 Aug 14 22:17:12
The top #mobile #apps by age, and by total share of time spent. Aka Why $FB is worth $200B. Source: @comScore. http://t.co/l9r0ILWfZ8
Interesting Facts
27 Aug 14 22:17:02
Yesterday, Facebook was down 45 minutes globally and lost about more than $1,000,000 in advertising revenue. $FB
Trent Watson
27 Aug 14 21:56:11
Long Term, Tech Funds Lag Energy and Real Estate http://t.co/WBkpWV3TVU #IBDNews via @IBDinvestors $FB $SWKS
danielo
27 Aug 14 21:45:27
$FB solid PT at $82
BUZZ Just-In
27 Aug 14 21:43:17
Access curated tweets- high relevancy, less spam- Social Media Stocks http://t.co/ajElRTb2Qc $TWTR $LNKD $FB $GRPN $ZNGA
Next
27 Aug 14 21:36:44
RT @MetaTrades: Twitter #ShortInterest drops by 30% http://t.co/OiFYzfaY42 $TWTR $FB
Gus Fuentes
27 Aug 14 21:35:09
RT @Nobears_Nobulls: Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias h…
omar zahid
27 Aug 14 21:34:56
if $FB hit's $77-79 by friday, i will have to cop these roshe run flyknits
Nelson Molina
27 Aug 14 21:33:37
$SPY $AAPL $FB $CERN $JPM $KNDI $MU $LNG $LNG $MIC $WMB $ACT $AGN Get ready for tomorrow. Dog Video Update. Trade ON http://t.co/nNFlDEaVIb
tarun pathak
27 Aug 14 21:33:33
RT @craigbuj: Hike - another home run for Tiger Global ? 35 million users (15 million added last 2 months), 10 billion messages / month $FB…
Fazli Erdem
27 Aug 14 21:30:12
RT @SeekingAlpha: Facebook Gets A Rare Downgrade http://t.co/eUx8vwGKOJ $FB
John Michael
27 Aug 14 21:29:06
RT @SeekingAlpha: Facebook Gets A Rare Downgrade http://t.co/eUx8vwGKOJ $FB
Media Sentiment
27 Aug 14 21:24:54
$FB received a new alert. Find out why at http://t.co/nZwqRf3BRT #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 411
Quantpost Technology
27 Aug 14 21:24:49
$FB News Alert: http://t.co/B01uFf8tkZ Updated options view: https://t.co/vLoYrE5I9B All options views: https://t.co/gu71urtdg5
Seeking Alpha
27 Aug 14 21:24:47
Facebook Gets A Rare Downgrade http://t.co/eUx8vwGKOJ $FB
No bears No bulls
27 Aug 14 21:24:44
Cierre de algunas de las mas destacadas compañías en Walt Street $AAPL $ AIG $FB $GM $GOOG $JPM $NKE @EfektoNoticias http://t.co/lUGuEKvXLO
Hereitfirst
27 Aug 14 21:20:46
trade $MNKD $JPM $TBEV $DRL$WHX $BBY,$TSLA $YHOO $RSO $SPY $VJET $ACRX $DDD $AAPL $NFLX $GOOGL $GOOG $BIDU $AMZN $FB http://t.co/uTZpFW8a4K
Bulls vs Bears
27 Aug 14 21:19:42
$FB: Alibaba Shows Strong Growth In Revenue, Earnings Post http://t.co/nan0PtK7C0 http://t.co/2vv4ePmuCj
ⓢ
27 Aug 14 21:17:46
$FB http://t.co/YTvMqVltlP
Bidness Etc
27 Aug 14 21:15:13
Janney Capital downgraded Facebook to Neutral on the back of valuation headwinds It will face next year http://t.co/IrlraVUUOr $FB
Chasing Stars
27 Aug 14 21:09:37
$FB Filings http://t.co/D3hUuHeQjo Also See: $XLV $IBM $MCD $AMD ~
Craig Bujnowski
27 Aug 14 21:08:25
Hike - another home run for Tiger Global ? 35 million users (15 million added last 2 months), 10 billion messages / month $FB $TWTR
Brutus
27 Aug 14 21:07:09
RT @treehcapital: A lot @ericjackson: $FB=$192B market cap & $BABA's FCF was double it in Q2 ($1.7B vs. $872m). What is Alibaba worth? (di…
Investors Hangout
27 Aug 14 21:04:38
$FEYE Ask http://t.co/zypuqT64A3 Also See: $FB $GTAT $SSYS $GRCU ~
Adam Gank
27 Aug 14 21:03:38
RT @Weeb644: Going out on a limb but I think by next earnings $TWTR PPS will be higher than $FB. I think revs are gonna be huge for both.
moderneconomist.com
27 Aug 14 21:03:38
RT @timothysykes: THIS IS ALL 100% REAL http://t.co/6QtENPrU0a SO WHO'S NEXT $FB $TWTR $LNKD WHO! TELL ME!
Brian Bolan
27 Aug 14 21:02:07
RT @BrattleStCap: Seeing so many shitty TWTR ads and people bitching about them. Reminds me of when $FB first introduced ads. Aka: it's tim…
Trevor G
27 Aug 14 21:02:07
Going out on a limb but I think by next earnings $TWTR PPS will be higher than $FB. I think revs are gonna be huge for both.
Brattle St. Capital
27 Aug 14 21:00:42
Seeing so many shitty TWTR ads and people bitching about them. Reminds me of when $FB first introduced ads. Aka: it's time to get long $TWTR
Stock Forums
27 Aug 14 20:59:44
$FB Ex-Div Date http://t.co/QZKcjj5Jrv Also See: $WMT $MYEC $SMH $DSW ~
Derrick Walker
27 Aug 14 20:56:29
RT @timothysykes: THIS IS ALL 100% REAL http://t.co/6QtENPrU0a SO WHO'S NEXT $FB $TWTR $LNKD WHO! TELL ME!
Investors Hangout
27 Aug 14 20:52:57
$FB P/E Ratio http://t.co/4QgmsZW4fs Also See: $GE $GS $DIA $OIH ~
Craig Bujnowski
27 Aug 14 20:52:41
will be interesting to watch Snapchat, WhatsApp + Twitter morph into mCommerce platforms --> WeChat + Line $FB $TWTR http://t.co/ViePZo88EH
Investors Hangout
27 Aug 14 20:51:02
$FB Message Board Posts http://t.co/INEV4e8JTr Also See: $PRKR $DUST $BNS.TO $HYG ~
Timothy Sykes
27 Aug 14 20:50:18
THIS IS ALL 100% REAL http://t.co/6QtENPrU0a SO WHO'S NEXT $FB $TWTR $LNKD WHO! TELL ME!
Stockaholics
27 Aug 14 20:47:54
REVI closed up 44.5% today! Special Update: http://t.co/6o15AzsDr3 $FB $MDLZ $CELG
Rosner Stocks
27 Aug 14 20:41:04
$FB Ask Size http://t.co/jqLaaHZp3t Also See: $WTSL $KNDI $PBR $GDXJ ~
Jeff Richards
27 Aug 14 20:39:05
"That may turn out to have been a mistake" VC circa Oct 2007 re $FB miss. Thought provoking post from @paulg http://t.co/koJDy8ssJk
Jason
27 Aug 14 20:26:34
$FB If downgrading is the only way for the bearish guys to push down the price, it means the stock looks good fundamentally and in LT
				
				
  +Follow October 2, 2013 11:58AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.