Bitcoin is important to peer to peer lending in many ways. One of the biggest reasons why is that it leads to easy, simple and inexpensive cross border lending. What many people are not aware of is that after the dollar (USD) and the British pound (GBP), the next biggest peer lending currency is Bitcoin (BTC).
What happens to Bitcoin affects the entire p2p mkt whether we realize it or not.
The US Marshal Service (USMS) announced this week that with a $200,000 cash deposit, you or me or anyone else can participate in the auction of 30,000 BTC, or the equivalent of ~$18 million. This is all to do with the confiscation of the BTC from the illegal site Silk Road. The story on Silk Road is here and the announcement of the sale is here. The US Marshal Site showing the Asset Forfeiture Sale is here and is listed below.
Whether you are a fan of BTC or think it's crazy, one thing is for certain. The lack of gov't interference, especially in how much of the currency can be printed has the attention of many people. When the US Gov't rules on or talks about BTC, everyone listens. The USMS is auctioning off all 30,000 BTC in blocks of 3000 BTC or about $1.8 million per block.
Why this is good for us
If you are a fan of BTC, you should be glad that this is happening. There's been a lot of talk of flooding the market with these coins and BTC has dropped in price since the announcement. Even if that happens, this is still a very very good thing. Why? Because the gov't is selling the BTC instead of destroying it. If the gov't really thought that BTC was nothing and had no place in our system they would just destroy it. The fact they are selling them and putting them back out into the market is a huge sign of legitimacy for Bitcoin. Now its also a sign the gov't needs money but that need for them has created extra legitimacy for BTC and for those of us who are fans of it. Each extra piece of legitimacy, like trust in our peer lending platforms, puts it closer to mass market acceptance.
How this sale affects us
I don't know about you but I have been trying for months and months to diversify into peer lending platforms in currencies outside the dollar and I've been unable to do so without being a resident or citizen or having an existing bank (or equivalent account) in that platform's home country. This is been time consuming and frustrating.
You cannot be truly diversified in peer lending if every loan is to US consumers and in the USD.
Now I have my outlet to lend in something other than the USD that has good lending platforms and good infrastructure backing it and that is in BTC. My first loans added to my portfolio will be posted in my June portfolio report.
This extra liquidity and the publicity surrounding it are good both short and long term for the BTC market. The fact we can use these BTC that we acquire and then lend them out is just a bonus.