True, but chanting that at every correlation you see is a great way to never learn from anything.
To be honest it's a bit hard to believe this reporting has nothing to do with the price dropping ~10%, given that one of BitCoin's big parts of its value prop is precisely supposed to be that governments can't do this.
Bitcoin says that whoever has the private key controls the funds. In this case, whoever was in custody before the FBI took the funds was seriously negligent in protecting their private key (which is not that hard to do).
Governments can simply take the private keys if they wish along with your computer. Come up with smart ways to avoid that (but I'll memorise the private key!) and they'll just lock you up instead.
In the case of coins moving through exchanges, they can simply take the coins instead by threatening the exchange.
In many other cases they can also catch you when you try to use the money by converting it into a currency that people actually use to transact like USD.
That it is "easy" to protect private keys is the theory, yes. If it turns out not to be an accurate reflection of reality, that's going to affect the value proposition of BitCoin.
As best I can tell, Bitcoin has moved more than [it has so far today, ~6%] on 42 days in the last year, and 38 days the year before that, considering open-to-open values.
10% daily moves happened four times in May: twice in each direction.
Statistically, we should consider it just a normal, unremarkable day for Bitcoin.
True but the cryptocurrency world doesn't seem to understand that. They're always tying events to price rises, and making proclamations about what will happen to the price in the future as a result.
That is true - it is, after all, entirely possible that the BTC price drops caused the Colonial ransom seizure. [1]
Perhaps people are correctly estimating that as BTC is likely to lose another use case for it (ransomware)[2], there is now less demand for it, thus resulting in the downward price pressure we've seen over the past few weeks.
Perhaps criminals are correctly predicting that 'their' BTC might be taken away from them, thus causing them to liquidate their positions, thus resulting in downward price pressure. [3]
[1] I am, of course, making a joke.
[2] The writing is on the wall, due to the government reaction to the Colonial hack.
[3] No, Monero is not a solution for them, because the FBI is not stupid. XMR:BTC is largely sideways. If ransomware switches to it, it's likely that exchanges transacting in privatecoins will be treated as international money launderers. https://coincodex.com/convert/monero/bitcoin/?amount=1
True. But the prices of most of the ALT coins are correlated with BTC, which has also caused them to go down too (in the same way they went up with it before May).
I wonder if the future push towards Proof-of-Stake away from Proof-of-Work will one day stop this happening.
It’s not, but it sets the precedent that the FBI will seize bitcoin without any kind of due process when it is able to recover proceeds from a criminal transaction
.
This jeopardizes the use of Bitcoin as a currency for cross-border criminal transactions which is a large if not majority share of its use case.
So it’s easy to see why its value went down — fewer criminals will want to use it.
>This jeopardizes the use of Bitcoin as a currency for cross-border criminal transactions which is a large if not majority share of its use case.
Do criminals seriously expect that bitcoin (or any other cryptocurrency) is safe against the wallet being hacked? Hardware/cold wallets have been around for years, so this is more of an opsec issue than a technology issue.
Hell yeah they will, honestly it's about time we did some more aggressive offensive security operations.
But what does crypto have to do with criminals? Criminals just need to up their op sec game, they know that. BTC dropping is only related insofar as this stupid correlation is getting pushed hard in the media right now.
A possible causal factor is that much of the crypto world actually thinks BTC is private. It's not. It's the opposite: a 100% public fully replicated ledger.
To be honest it's a bit hard to believe this reporting has nothing to do with the price dropping ~10%, given that one of BitCoin's big parts of its value prop is precisely supposed to be that governments can't do this.