This can slow down the adoption rate by people who need stabile exchange mediums. On the other hand it doesn’t undermine Bitcoin as alternative as all major asset markets are influenced directly or indirectly through market interventions.

$110MM is pretty impressive holding for biggest Bitcoiner, or better say the top wallet, but unless you’ve got the means to print 85 billion per month, every month like FED, this will stay as danger to crypto-currencies.

Ben Bernanke himself said Bitcoin has potential. The MSM features and promotes bitcoin almost daily,the government could easily ban bitcoin and make it illegal. They have not. These may be all signs that it was created with bigger purpose than small “revolution” against fiat system.

In name of “national” interest activities?

The CIA was interested in Bitcoin close to the beginning. Do you not think they had a meeting after that little talk discussing how they could use it to their advantage?

My humble opinion is that the meeting went something like this:

“So wait we can just put a few super computers on this thing and get tons of them for free without changing the market, ok, do that. Ok , just to be safe, buy as many bitcoins as you can into as many wallets as you can, I don’t care if it goes from 50 cents to 9 dollars or to 1000 dollars for that matter.”

They could have gotten tons of Bitcoins for free mining and the lions share of this tiny market. With a market share like that they could do whatever they wanted at times of low liquidity. I don’t think this is a conspiracy theory, its only what I would do in their shoes, if for nothing else for a little safe keeping control.

Can I compare Bitcoin to Gold?

Bitcoin follows ‘laws of thermodynamics’, just like gold; there’s a financial cost attached in attaining each Bitcoin.

To get Bitcoin you need to mine it, as the difficulty increases in breaking the encryption that acquires each Bitcoin, so does the infrastructure cost and electricity cost. If today it costs $2000 in electricity and + $100 per coin in infrastructure cost, no one will be mining Bitcoin if coin price is $1000. Just like no one will mine gold to lose money.

An ounce of gold or a line of code has no difference if the cost of attaining either one is equal. Both Gold’s and Bitcoin’s value comes from the utility of using them as a currency or store of value.

Throughout most of history people had little industrial use of gold, it was valued for its scarcity. We are born into the belief that gold is valuable. Bitcoin has only been around for 3-4 years.

Bitcoin’s competitive advantage comes from the fact it is the first borderless and decentralized currency, instantly transferrable to anywhere in the world, a property gold does not have.

There’s approx 5.8 billion ounces of gold ever mined, compared to Bitcoin’s total of 21 million coins possible. ~270:1 ratio. So if Bitcoin ever becomes as “traded” as gold, each Bitcoin will be $300 000 relative to today’s oz gold price [This is a simle calculation, not a projection price].

Can one country threaten to outlaw the Bitcoin system?

There is a lot of fear of mighty world central banks that could threaten the digital currency success. Expecting that US can enforce rules over digital currency transactions abroad.

Capital is always transferred from losers to winner, game theory at work. If one country or possibly group of countries tries to ban Bitcoin protocol other groups could greatly profit from such a move.There are another 160 countries that will let you transact in Bitcoin if the US shuts it down.

Transparency is the currency. Anonymity threatens only control hungry governments.

All I can offer up to skeptics is for them to imagine the Fed, central banks, COMEX, etc all having an online real-time audit web portal open to everyone to examine any account and any time and track any transaction ever made in their entire history.

And that any transaction that was without a 1:1 backing would be rejected by every single participant in the market. The world would be a very different place than the opaque manipulation of today.

Bitcoin is the entity that supports this level of auditing and transparency. That’s why they’ll have to attack it in ways we haven’t seen before, because the usual sneaky manipulation either isn’t possible.