Bitcoin: Is This the End of Rico?

bitcoin price - Bitcoin: Is This the End of Rico?

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Bitcoin (CCC:BTC-USD) is starting to remind me of the ending of a classic gangster film.

At the end of the 1931 film Little Caesar, Edward G. Robinson’s title character lies dying in the street and asks, “Is this the end of Rico?” It certainly wasn’t for Robinson, who became a legendary actor playing variations of the character. But it was the end of the movie, the end of the bad guy … the end of that story. That may be what we’re seeing with the bitcoin price.

Bitcoin has always been a haven for crooks, charlatans and con artists, as well as alleged crooks, charlatans and con artists. Many sponsors simply ran off with the proceeds from their Initial Coin Offerings. Exchanges went under or were accused of price manipulation in regards to the price of bitcoin.

China, where much of the action has occurred, has been trying to ban bitcoin entirely, like Mao waking from troubled dreams to find he has become a market cockroach. All of this has placed a heavy burden on the bitcoin price over the past few months.

Bitcoin: Oceans Rise, Empires Fall

This week, the bitcoin price and other cryptocurrencies are in what some are calling a final, climactic fall, with the price of bitcoin dropping to the low $6,000s as of this was writing. That gives bitcoin a market cap of $111 billion, the amount of cash Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) CEO Warren Buffett reportedly had burning a hole in his pocket last month.

Other cryptocurrencies are falling even faster, with the total market value of over 1,900 cryptocurrencies now estimated to be $202 billion.

The catalyst for the latest collapse came in reports that Goldman Sachs (NYSE:GS) is backing off plans to create a cryptocurrency trading desk. Such a move would put a Wall Street imprimatur on the market, bulls say, but Goldman has been Godot in this play, and the traders acting as Vladimir and Estragon. (Reporters play the boy.)

Another catalyst may be the introduction of a “membership program” by Shapeshift, a major crypto exchange. While pushed by CEO Erik Voorhees as an optional “loyalty program,” the exchange will soon make membership mandatory, meaning traders will have to give identities to play in the market.

“Yes, that last detail sucks,” Voorhees writes, but anonymity, and the resulting freedom from government oversight, is what attracted a lot of people to crypto in the first place.

The Bitcoin Price: It’s About China

China’s moves may be a bigger catalyst. China is the largest bitcoin market. It’s where the biggest miners live, where the biggest exchanges have been. Throughout 2018, China has been cracking down, in fits and starts. On Aug. 5, agencies warned against speculation, and two weeks later blocked access to offshore exchanges.

Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) no longer support bitcoin in payment apps, and other countries are supporting the clampdown. Russia has seized bitcoin ATMs, and England has issued warnings against “unauthorized” exchanges.

What China is trying to do is clear out the bitcoin stables, while supporting new blockchain applications. Bitcoin has a bad odor, but the underlying technology, with encrypted blocks in a general ledger, holds promise for tracking assets and reducing trading costs.

ICE Hope

Intercontinental Exchange (NYSE:ICE), owners of the New York Stock Exchange, has not abandoned its plans for Bakkt, its regulated crypto platform, with crypto bulls hoping that its launch in November will firm prices.

That might happen, but it won’t be your father’s bitcoin. If bitcoin has a future, it’s as a fully regulated, Wall Street standards compliant, and government-approved asset class. That’s what ICE is building. That’s not what the “Bitcoin Boys” signed up for, with their cyber-libertarian ideals, hidden fortunes and buyer beware ethos.

The bitcoin price might make a comeback, but for now, people are exiting the theater to await that second show.

Dana Blankenhorn is a financial and technology journalist. He is the author of a mystery novella involving bitcoin, The Reluctant Detective Saves the World, available now at the Amazon Kindle store. Write him at or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in BABA. To follow the value of cryptocurrencies bookmark

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