Bitcoin investment company Delta Financial, which was offering financial services such as interest accounts and trading products, announced today the termination of its operations. This announcement comes a few days only after the closure of another bitcoin startup, Vault of Satoshi. Also read: Vault of…
Also read: Vault of Satoshi Makes Cold Wallets Public
Designed to democratize Bitcoin speculation, the company generated enthusiasm in the bitcoin community for its promise to guarantee a 5% minimal interest per year to its customers.
An announcement posted on Delta Financial website is describing the recovery procedure for existing customers:
Delta Financial will be ceasing its current services, including its interest account and trading products, as of January 30, 2015. Funds held in interest accounts will stop accumulating interest effective immediately.
We encourage users to log in and submit withdrawal requests for their BTC as soon as practicable. We will use our reasonable best efforts to make sure all client BTC is returned, even after we cease our current services. Effectively immediately, our trading engine will only allow you to purchase BTC, not sell. For users with USD balances over $1,000, you may request a withdrawal via wire by emailing email@example.com.
To be clear, all user funds on our system are properly accounted for, and this closure is not the result of any security-related issues. Simply put, the financial products we wanted to build on the Bitcoin platform simply require a bigger trading volume than that what exists today.
We remain believers in the long-term potential of Bitcoin. We greatly appreciate the support from the Bitcoin community over the past year and look forward to watching and supporting the continued growth of the Bitcoin ecosystem.
Please contact us at firstname.lastname@example.org if you have any questions.
– Delta Financial”
The reason of the “low trading volume” mentioned by Delta Financial is not too hard to find.
A recent study conducted by the U.S. Federal Reserve demonstrated that Bitcoin’s volatility has been historically low since 2013, ranging from 12 to 15%.
Therefore, there’s a very little incentive for speculators to trade the crypto-currency: popular financial instruments such as leveraged positions are directly tied to the intensity of the asset’s fluctuations.
Speculators should consider another interesting trend of the crypto currency: its declining price.
Put in comparison with the astounding $1200 reached in December 2013, the current price should be a strong incentive for anyone willing to do a long term investment. And it is not Tim Draper, the legendary venture capitalist who bought about 30,000 bitcoins in mid-2014, that is going to tell you the opposite!
As evidenced in a previous article wrote by my colleague Evander Smart: “Poor people buy high, panic, and sell low.”
Are you going to be smarter than them?
Images from Shutterstock.
Last modified: January 25, 2020 10:08 PM UTC