Bitcoin Prediction: Death by Tort Lawyer
The Bitcoin price correction most of us expected seems to be occurring
So what is next for Bitcoin? I predict death by lawyer. In modern America, no one loses this much value this fast without calling an attorney, because such losses can't possibly be due to one's own poor decision-making (e.g. buying an illiquid currency after a 5x runup in its price), it must be due to GETTING HOSED. I am not a securities attorney, but my guess is that someone will argue Bitcoin was not a currency but a digital commodity and that commodity trading laws were not followed. Or something like that. The CFTC, which left MF Global customers hang out to dry, will launch a simultaneous investigation to gain pub for themselves and support the civil suit. Because it will be a much higher priority for this Administration to kill an incipient competitive currency than to go after a major Obama bundler.
Anyway, the main entertainment value will be to see if there is actually someone who can be sued, given the dispersed nature of the Bitcoin network. But expect people to try. I would even bet we see the suit in days -- "entrepreneurial" tort houses probably have already drafted the paperwork and gotten some schlub to buy 1 bitcoin so he can be lead plaintiff (preferably in a hand-picked jurisdiction) in the class action and are just waiting for the bubble to burst to file.
