{"id":302,"date":"2014-01-09T02:28:00","date_gmt":"2014-01-09T02:28:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/bitcoins-four-steps-to-wall-stree\/"},"modified":"2022-12-26T17:55:43","modified_gmt":"2022-12-26T15:55:43","slug":"bitcoins-four-steps-to-wall-street","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/01\/bitcoins-four-steps-to-wall-street.html","title":{"rendered":"Bitcoin’s four steps to Wall Street acceptance"},"content":{"rendered":"
(YahooFinance<\/a>) Bitcoin’s resiliency-as well as
\nits recent rise above the $1,000 mark-is gaining it additional converts
\nto the belief that the cryptocurrency is for real.<\/div>\n

 <\/p>\n

\n

One of the latest skeptics-turned-believers is Ty Danco, a respected
\nmarket veteran who has worked up one side of Wall Street and down the
\nother. Danco once oversaw more than $60 billion of assets and now is the
\nCEO at a trading firm called BuysideFX.<\/p>\n<\/div>\n

 <\/p>\n

In an essay for the subscription-only Tabb Forum<\/a>,
\nhe outlines what he sees as the future for bitcoin, the digital
\ncurrency that last was trading at one unit equaling more than $900.<\/div>\n

 <\/p>\n

\n

“The media thoroughly covered its meteoric rise in market value as a
\ncurrency, but the bigger story is that high-profile investors have
\nplaced significant bets on Bitcoin-related businesses this year,
\nincluding Li-Ka Shing, Union Square Ventures, and Andreessen-Horowitz,”
\nDanco wrote. “Given their involvement, bitcoin demands a serious look.”<\/p>\n<\/div>\n

(Read more<\/i>: Do you really know bitcoin? Here are 11 myths <\/a>)<\/p>\n

 <\/p>\n

While acceptance for bitcoin continues to grow-gaming website Zynga (ZNGA<\/a>)
\nthis week said it would accept bitcoins for payment-Danco said it faces
\nfour challenges before gaining Wall Street’s acceptance:<\/div>\n

 <\/p>\n

1. Clear regulation<\/div>\n

 <\/p>\n

\n

It seems bitcoin’s path to legitimacy runs straight through government
\nand regulatory agencies, quite likely the Commodity Futures Trading
\nCommission. Says Danco:<\/p>\n<\/div>\n

 <\/p>\n

\n
Early signs from regulators are more promising than I initially
\nexpected, but we still have a long way to go. CFTC: Bitcoin most likely
\nfalls in your lap, whether as a commodity, currency, or derivative. Take
\na stand!<\/i><\/div>\n<\/blockquote>\n

 <\/p>\n

2. A) More adult supervision, and B) Big endorsements.<\/div>\n

Bitcoin indeed needs to shed its image as a toy created by hobbyists
\nand nerds. After all the leading bitcoin exchange is Mt.Gox, which is
\nnot an abbreviation for “Mount Gox” but rather an acronym for Magic The
\nGame: Online Exchange, where folks used to trade cards for a Dungeons
\n& Dragons-esque game.<\/p>\n

\n
I can’t see Prudential Insurance, Vanguard or the Monetary Authority of
\nSingapore trusting their assets with these kids. Those of you running
\nBitcoin exchanges, dump the rhetoric, go hire some pros from SWIFT, the
\nmajor credit card companies, central banks, the FSA, etc.<\/i><\/div>\n<\/blockquote>\n

On 2B, bitcoin already has gotten some pretty weighty
\nendorsements-hedge fund titan Mike Novogratz<\/a>, for instance-but could
\nuse a little more heft, Danco said.<\/p>\n

 <\/p>\n

(Read more<\/i>: Bitcoin endorsed by top hedge fund manager <\/a>)<\/div>\n

 <\/p>\n


\nTo get broad buy-in of its legitimacy, Bitcoin needs some sponsorship
\nby big players. Some well-known VCs have jumped in, but we need one or
\ntwo mammoth banks like JPMorgan (JPM<\/a>) or Deutsche Bank (XETRA:DBK-DE) to come onboard; not shady entities based out of the Caymans<\/i><\/p><\/blockquote>\n

3. Establishing two-way transactions and delivery vs. payment (DVP).<\/p>\n

DVP is another byway on the way to legitimacy. It ensures that users of
\nbitcoin aren’t going to get ripped off on the other end as it requires
\npayment at the time of delivery for the goods in question.<\/p>\n


\nWhen a DVP and security registration can be automated via a
\ndecentralized P2P process, Bitcoin takes the banking world by storm.<\/i><\/p><\/blockquote>\n

 <\/p>\n

4. A clearer identity.<\/div>\n

 <\/p>\n

Danco explains:<\/div>\n

 <\/p>\n

\n
Finally, to become institutional, Bitcoin requires optional and
\nverifiable identity opt-ins. Identity for securities settlement
\ninstructions is going to be known in advance before diving into
\nanonymous-looking alphanumeric strings of private and public keys. (An
\nexception may be made for dark pool transactions.) My guess is that
\ninstitutional “wallets” (read:custody accounts for bitcoin) may have
\nsome identifiable and consistent beginning, then unique and
\ncryptographic back ends.<\/i><\/div>\n<\/blockquote>\n

While achieving the
\nfour steps will be difficult, it also is very doable, rendering bitcoin
\nskeptics increasingly into the shadows.<\/p>\n

It’s hard
\nto go against 30 years of habit, but this old dog has converted from
\nKrugmanesque bitcoin hating to being optimistic about virtual
\ncurrencies. It will be time for new tricks soon, but bitcoin needs to
\ncheck a few boxes before it’s ready for primetime. <\/i><\/p><\/blockquote>\n\n\n\n\n
<\/a><\/td>\n<\/tr>\n
\n
Tomohiro Ohsumi | Bloomberg | Getty Images<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

(YahooFinance) Bitcoin’s resiliency-as well as its recent rise above the $1,000 mark-is gaining it additional converts to the belief that the cryptocurrency is for real.   One of the latest skeptics-turned-believers is Ty Danco, a respected market veteran who has worked up one side of Wall Street and down the other. Danco once oversaw more […]<\/p>\n","protected":false},"author":1,"featured_media":912,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,76,468],"tags":[764,1126],"yoast_head":"\nBitcoin's four steps to Wall Street acceptance -<\/title>\n<meta name=\"description\" content=\"Discover the four key factors driving Bitcoin's acceptance on Wall Street. 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