This business is interesting. You deposit Bitcoins with Bridgewalker Bitcoin Wallet (BBW). BBW then guarantees that the FRN-deonominated value of your account will stay the same.
For example, if you deposit $20 (USD) worth of Bitcoins, and the Bitcoin/USD exchange rate goes up, then you have fewer Bitcoins in your account but still $20. Conversely, if the Bitcoin/USD exchange rate goes down, then more Bitcoins are added to your account so that the value of your account stays at $20.
Do you see the fallacy?
First, the guarantee is impossible. If the Bitcoin/USD exchange rate crashed, there’s no way BBW could meet its obligations to its customers. BBW almost certainly doesn’t have enough reserves to cover the loss. (They might covert customer deposits to USD immediately when you make your deposit, but that defeats the purpose of using Bitcoins in the first place.)
Second, you’re making an interest-free loan to BBW. If you believe that Bitcoin is a better currency to hold then USD, then why would you give up the upside when exchange rates move in your favor?
Finally, BBW could practice fractional reserve banking. In other words, they could Ponzi it. When you deposit Bitcoins with BBW, they can immediately spend them. They keep a small amount of Bitcoins in reserve in case customers demand a payout, but otherwise they can spend their cutomers’ money on other things.
Notice the statement on the website, “Our transaction fee is 1.5%.” That is false, because there also are all the costs I mentioned.
That’s one disturbing thing about Bitcoin. It’s attracting scam artists, looking to exploit people.
Bridgewater Bitcoin Wallet is almost certainly a scam. It is impossible for them to meet the guarantee they promised their customers, preserving the USD-denominated value of customers’ accounts; if the Bitcoin/USD exchange rate crashed, they would be stuck. What’s the point of holding a Bitcoin account pegged to USD, especially if you believe that Bitcoins are a better investment than USD? Finally, they can practice fractional reserve banking with customers’ money.