“What happens if the government makes bitcoin illegal?” is a question you will frequently hear. The underlying assumption — the same one that Prohibitionists made in the early part of the last century — is that usage will decrease, or even stop altogether, if you make something illegal.
But this is not necessarily so.
On September 24, Chinese regulators issued two documents[1]: One outlawed cryptocurrency mining, the other reiterated a ban on all cryptocurrency transactions and noted that all companies providing cryptocurrency trading services to Chinese citizens are engaged in illicit financial activity.
And here we are, just over a month later, and the price of bitcoin is up over 50%...
Meet The New Boss, Same As The Old Boss
Bitcoin has broken out to new highs against almost every currency there is, even the U.S. dollar. Bitcoin’s market cap has never been bigger. The network is stronger than ever. Mining simply relocated following China’s regulatory notice.
This is now the 18th — something like that, anyway — time China has attempted to ban bitcoin. Its bans don’t seem to have the desired effect.
The reason for bitcoin’s recent rally, certainly the latter part of it anyway, was the announcement last week that there will, finally, be a listed bitcoin exchange-traded fund (ETF).
Said ET, the ProShares Bitcoin Strategy ETF (NYSE:BITO), began trading on October 19[2]. It turned over almost $1 billion[3] (we don’t know the precise number as of this writing), with more than 24 million shares changing hands.
This makes it the second-most-heavily-traded fund on record[4], beaten only by a BlackRock carbon fund, which ranked higher due to pre-seed investments.
We have been waiting a long time. The Winkelvoss twins tried
