Bitfinex Bitcoins- Fake Currency, Fake Exchange…(uggh)

Bitfinex Bitcoins- Fake Currency, Fake Exchange…(uggh)

Bitfinex Bitcoins- Fake Currency, Fake Exchange…(uggh)

Bitfinex bitcoin

So, the inevitable happened, someone hacked Bitfinex where I kept part of my Bitcoin stash. It sounds like I’m getting back 64% of my bitcoins and a BFX token which I can potentially exchange for shares of iFinex Inc., which happens to be the Bitcoin exchange that lost my damn bitcoins in the first place!!! Why would I want to own non-tradable illiquid equity in an exchange that no one will ever want to put money into again? Why do I want BFX tokens? Why do I want Bitcoins in the first place? This has now been the second sizable hack in 2 months (the other was ETH), where someone successfully stole crypto-money and turned it into real money. Momentum may still rule the day, but when your fake currency can be stolen by real crooks, it’s unlikely that a true mania bubble can form—manias are built on misplaced trust. At this point, Bitcoin may not even appear safe enough for the Chinese to launder money with. At least Beanie Babies and baseball cards were safe in your basement. The whole premise of Bitcoin Bubble 2016 was that a new group of exchanges had grown up with venture capitalist supervision and there would be no more Mt. Gox style implosions.

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Fortunately, I split my bet between 2 exchanges due to security fears. Even more fortunately, I kept substantially more at the other exchange due to it having more prominent backers—I chose Bitfinex because it was the exchange with the most US Dollar trading volume. Over the past few days, I’ve been cashing out my Bitcoin from the exchange that hasn’t been hacked. In case you’re curious, even if I hadn’t been hacked, I would still be selling as it is much less likely that this becomes a bubble now. While I haven’t figured out the value of my (likely worthless) BFX tokens, with a bunch of sales at just under USD $600 at the un-hacked exchange, compared to my cost basis at USD $450, and a 64% recovery of my Bitfinex Bitcoins, it seems like I will actually come out with a small gain on this fake currency.

Back to real investing…


Categories: Current Investments
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