Saturday, March 11, 2017

Bitcoin plummets after SEC announcement (just kidding)

At Backyard Bitcoin our main focus is all about using bitcoin and cryptocurrency in everyday life. We believe that the wider the adoption of bitcoin the stronger it will become. Bottom line: We love Bitcoin.

So, even though this was a little bit out of our backyard we still watched the news and the buzz last week that swirled around the SEC decision on whether they were going to approve the Winklevoss proposal for a new Bitcoin ETF.

For any of you that weren't watching here is the spoiler: The ETF was not approved.

Leading up to the announcement it looked as though speculators were buying up bitcoin in the hopes that if the ETF was approved then the price of bitcoin would go up even more. At one point in the week the price hit $1300 (US Dollars).

We watched from here with our Google alerts set on stun and our Twitter account following various hashtags to see who might announce the news first.

As the excitement grew we even posted short updates on Facebook. One thing I was reminded of right away was that, when you get into a specialized subject like cryptocurrency, it is easy to slip in to "jargon". A number of people responded to our posts about the ETF watch with comments like "Huh?" and "What?".  Backyard Bitcoin is designed to bridge the gap between the nerd and the newcomer and so at first I thought these comments might be in response to the word Bitcoin but then I realized that the term ETF was entirely foreign to a number of our readers.

An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index. (That is the wiki definition of an ETF. If you are unfamiliar with what an ETF is this definition may not help all that much. If you want to know more about bitcoin and money see our reading recommendations at the bottom of this post).

The SEC (or US Securities and Exchange Commission) was tasked with approving a Bitcoin ETF put forward by the Winklevoss brothers (made famous in part because of the movie "the Social Network" which was based on the story of how Facebook came to be).  This process would mean that Bitcoin would gain a definition by the US government of whether it is currency, commodity, or what. What exactly is bitcoin? 

At the end of the day the announcement came out that the ETF was not going to go through and the price of bitcoin responded by dropping to just under $1100. This was a big drop for sure but not monumental considering that the price of bitcoin just last year started out around $400 and has been rising fairly consistently over the entire year.

The headlines that followed were harsh:

US regulators reject Bitcoin ETF, digital currency plunges

Bitcoin crashes after SEC reject Winklevoss ETF

Bitcoin: Price in Jeopardy after SEC Bitcoin ETF decision

You would have thought that it was the end of Bitcoin on Friday. But no. This is the great thing about Bitcoin. It is decentralized and not as susceptible to these market whims. Since the "crash" of bitcoin the price has begun to climb again and is currently at $1182.

It was an exciting week for Bitcoin / bitcoin. Here at Backyard Bitcoin we are even more excited about the weeks and months ahead.


If you use your bitcoin for an everyday purchase let us know about your experience by joining the discussion on 

If you want to know more about what bitcoin is exactly or just more on our monetary system in general here are our two reading recommendations (will post a separate review on each book in the weeks ahead but for now, pick them up and enjoy!)

The Internet of Money Volume 1 by Andreas M Antonopoulos 

Naked Money by Charles Wheelan

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