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Bitcoin No Bargain as 47% of Investors Go Bearish in Poll

“Bitcoin, in essence, is just an evolution of a payment system,” Sebastien Galy, a New York-based senior foreign-exchange strategist at Societe Generale SA, said by phone Jan. 14. “The ultimate concept of transaction, the innovation, is certainly progress in the means of transaction.” Photographer: George Frey/Bloomberg
“Bitcoin, in essence, is just an evolution of a payment system,” Sebastien Galy, a New York-based senior foreign-exchange strategist at Societe Generale SA, said by phone Jan. 14. “The ultimate concept of transaction, the innovation, is certainly progress in the means of transaction.” Photographer: George Frey/Bloomberg

Jan. 22 (Bloomberg) -- Almost half of international investors are bearish on Bitcoin, the most prominent of a group of virtual currencies that have enthralled entrepreneurs in technology and finance over the last year, according to a Bloomberg Global Poll.

Forty-seven percent of respondents say they would sell Bitcoin, while 11 percent say they’d buy it. Another 7 percent say they’d hold the virtual currency, while 35 percent say they haven’t got an opinion about it.

“When the taxi driver speaks about something, the bubble is here,” Francois Savary, chief investment officer at Reyl & Cie SA in Geneva, wrote in an e-mail.

Savary said Bitcoin doesn’t have the necessary features of a currency, such as being a stable store of value, to be successful.

The poll results reflect the mixture of intrigue and unease that Bitcoin has drawn from the investors. While those fluent in the mathematics behind the technology tend to embrace it, others are put off by the volatility of its price.

“The big rally observed in bitcoin prices from its creation is a big bubble, in my opinion,” said Fabio Henrique Galdino de Carvalho, an equity sales trader with Indusval in Sao Paulo. “I can´t understand how the investors can pay for anything without legal and solid guarantees.”

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Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto, and is the most prominent virtual currency to date. It has no central issuing authority, and uses a public ledger to verify encrypted transactions.

The currency can be used to pay for a range of products and services, including t-shirts, food or an appointment with a Manhattan psychiatrist.

Bitcoin’s value has risen 50-fold in the last year, according to the CoinDesk Bitcoin Price Index. One Bitcoin was worth about $870 yesterday.

Carvalho said the technological advance embodied in Bitcoin has promise, although the potential for illicit use is serious.

“The creation and free transaction based on cryptography data is the big advantage for users,” he said in an e-mail. “But the problem, for me, is: which users?”

Bitcoin has been the currency of choice for some illicit uses, such as an online drug bazaar called Silk Road, which has since been shut down by U.S. authorities.

The poll of 477 investors, analysts and traders who are Bloomberg subscribers was conducted by Selzer & Co., a Des Moines, Iowa-based firm. It has a margin of error of plus or minus 4.5 percentage points.

To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

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