From Worst to First: Bitcoin's Price Ends 2015 on Top

After a year filled with its share of doom and gloom, the verdict is in: Bitcoin won 2015.

As trumpeted by headlines in CNBC and Bloomberg, bitcoin was the best-performing currency of the year, netting near-40% gains, more than double its nearest competition, the Somali Shilling and Gambian Dalasi. The development contrasts with bitcoin's performance from 2014, in which it lost56% of its value, the most among global currencies.

A look at the CoinDesk USD Bitcoin Price Index (BPI) from October on reveals an impressive upward arch that contrasts with the choppy peaks and valleys of the year's earlier months.

Though the exact reasons are unclear, many pundits are pinning the currency's turnaround on the growing enterprise fascination with blockchain tech and the renewed mainstream attention from stories such as the alleged discovery of bitcoin's founder, Satoshi Nakamoto.

But as we head into 2016, a big question remains to be answered: Will recent price positivity continue to buoyed by fundamental market improvements?

While only time will provide the answer, we take a look back at the price movements over the last 12 months for clues and considerations.

January

Despite starting the year at just over $300, the bitcoin price crashed to a low of around $170 on 14th January, losing 37% of its value in two days. As an example of just how sudden and dramatic the drop was, even noted bitcoin bull Barry Silbert proclaimed the market had "capitulated".

The last time the price had crossed the $200 line had been in late October 2013, before its meteoric rise to more than $1,000.

The low price wasn't bad news for everyone, however. Traders got busy accumulating new positions and exchanges had their busiest day since a price rally in November 2014.

The price rebounded somewhat over the following 12 days to just over $270 and ended the month on a high note as the price rocketed over $300, seemingly at the news that exchange and wallet provider Coinbase had closed a $75m funding round.

February

February started on a low note as Coinbase euphoria waned and the price fell back below $250.

Mid-month, however, the bitcoin price gained nearly $50 in four days of trading. This represented a 23% gain over that period.

Soon, as was to become tediously common, the price once again settled back below $250, undulating around $240 before a slight climb to over $250 to close the month.

March

Bitcoin price gains that peaked at $286 were supported by strong volume growth early in the month. Some 3.67m BTC changed hands on the week ending 7th March, which was a 55% increase over the previous seven-day period.

The second half of the month saw a reprisal of the slump to the low $200s.

April to June

The above pattern was to repeat through the three months April to June, when the price generally sat level at between $220 and $240.

The best one could say about the situation, perhaps, was that the notoriously volatile digital currency had "found a floor", a positive for those who consider the digital currency a viable store of value.

The development wasn't so good for traders, of course, but many have said that low volatility is key if bitcoin is ever to go mainstream as a method of payment.

On 17th June, after months of relative calm, the price of bitcoin finally broke out of the doldrums and spiked to a high of $257.

One of the most prominent theories that emerged to explain the rise was related to the market's timing, which roughly coincided with growing indications that Greece would possibly default on its debt obligations – the 'Grexit', as it had been nicknamed.

The fervent hope among many in the bitcoin community was that Greeks would switch to the digital currency as they saw their banks accounts frozen and ways to move money in or out, such as PayPal and Western Union, were shut off in the country while a deal was hammered out with the EU.

Despite media reports selling that line, some commentators said it was just as likely that the price rise was a coincidence and the evidence for Greeks adopting bitcoin was very thin on the ground.

The price dropped slightly in the days after, before finishing June on a high of over $260.

July

On 13th July, the bitcoin price continued to climb, shooting past the $300 mark and reaching its highest level since 10th March.

Many still put the rises down to the economic situation in Greece; others attributed it to the psychological effect of people hoping for such a trend.

Mid-month, CoinDesk launched a reader's poll that concluded that some 62% of bitcoin enthusiasts believed the digital currency would be worth less than $500 at the end of this year. (While the trend is in the right direction to top $500, it's looking like our readers were right as we go to press).

After the possibly-Greek-influenced climb early in July, the price dropped slightly and spent the rest of the month around $275 to $290.

August

A general downward price trend through the month was interrupted by two notable negative events brought about by a single bitcoin exchange.

Firstly, on the 19th August, a 'flash crash' at Hong Kong-based Bitfinex caused the price of a bitcoin to nosedive 14% in a period of just 30 minutes.

The price had been holding steady between $250 and $255, but dropped to a low of $214.36 just before midnight (UTC). In the same period, the Bitfinex price sank 29% to $179.35.

The exchange told CoinDesk at the time that the flash crash was triggered when several leveraged positions were forcibly closed in close proximity to each other.

Then, on the 24th, just a few days later, the price slumped again after Bitfinex closed its order book for seven hours, citing issues with its post-trade processing.

September

Generally uneventful, September's prices hovered in the $230 to $240 range, with a peak at around $245 on 8th September.

What was promising, however, was the signs of a rising trend towards the close of the month, though it closed at just $236.

October

That upward trend noted at the end of September continued through October until it achieved a price of over $260 on 13th October, its highest price in two months.

The raise may have been caused by a sudden surge in bitcoin trading volume driven predominantly by the Chinese exchanges Huobi and OKCoin.

Bobby Lee, CEO of Chinese exchange BTCC, told CoinDesk at the time that his platform has seen a significant volume increase, though he dismissed much of his competitors' volume as "artificial".

Those behind the volume, he said, are not traders but consumers sucked into a Russian ponzi scheme, MMM.

The price trend nonetheless continued skywards and on 28th October it broke through the $300 barrier on the CoinDesk BPI for the first time in over three months.

Soon after, the price was at a new high for 2015, peaking at $333.75 on the 30th.

November

The positive trend continued into November, with the price rapidly reaching, first $400 on the 3rd, then over $480 on the 4th of the month.

The sudden rise prompted Wedbush Securities to revise its 12-month projections for the price of bitcoin and revealing it expects the price to rise to $600 over the next year.

After a sharp drop on the 11th that took the price back down to close to $300, it settled down to a new normal of around $325 for much of the remainder of the month, with a rise at the close to over $370.

December

So, here we are in the closing month of 2015, and the price is trending up.

On the 15th, it reached the highest level since September 2014, climbing to more than $465 across most major exchanges.

Despite a slight drop since then, pundits are enthusiastic, with many arguing the industry is poisedfor a positive start to 2016.

What is your prediction for the bitcoin price in 2016? Provide your thoughts below.

http://www.coindesk.com/bitcoin-price-in-2015-doom-and-gloom-give-way-to-positive-years-end/

Ex Agent Gets 6 Years Prison for Betrayal in Silk Road Probe

A government agent who stole $820,000 in bitcoins while investigating an online drug emporium was sentenced to almost six years in prison after a prosecutor said his deceit amounts to a “breathtaking abuse of trust.”

Shaun Bridges, who worked for the Secret Service, hijacked the account of an administrator for the Silk Road black market website to syphon off the digital currency. The U.S. said Bridges deserved a harsh sentence because the administrator was working as a government informant and was put in danger when Silk Road’s founder assumed he was the thief and tried to have him killed.
The informant, Curtis Green, sobbed on the witness stand Monday as he told a San Francisco federal judge he received more than 30 death threats as word got out that he had stolen from the Internet bazaar for drugs, hacker tools and other contraband. He said he couldn’t bring himself to describe in court the graphic threats to his grandchildren.

"So you can imagine the mental stress and anguish that it put me through," he said.
U S District Judge Richard Seeborg said when he imposed the 71 month senetence that Bridges commited and exteremely serious crime. he called it an extraordinary betrayal of public trust that could have gotten a person killed

http://www.bloomberg.com/news/articles/2015-12-07/federal-agent-should-get-six-years-for-bitcoin-theft-u-s-says.

Bitcoin's Creator Reportedly Living Suburban Life in Australia

Bitcoin’s elusive founder has for years evaded the efforts of tech geeks, journalists and fans to reveal his or her true identity. The mystery may finally have been solved.

The person who unleashed the virtual currency anonymously in 2009 is probably a 44-year-old academic living in suburban Sydney, according to Wired magazine.

Citing e-mails, deleted blog posts and documents, Wired identified Craig Steven Wright as the likely developer of the original bitcoin software under the pseudonym Satoshi Nakamoto. Gizmodo also identified Wright, along with his late friend Dave Kleiman, as being behind the currency.

Wright’s social-media profile suggests a man with an enthusiasm for virtual currency and computing. In addition to numerous college degrees and a stint as a chef, hisLinkedIn profile lists him as the chief executive officer of DeMorgan Ltd., which has researched bitcoin, proposed a bank for the currency, and offers wallet and exchange services. After years of mystery and failed efforts to unmask Nakamoto, many in the bitcoin community remain skeptical about Wright, who participated in a Las Vegas bitcoin event just weeks ago via videoconference.

“If the real Satoshi does appear, his opinion would be difficult to ignore,” said Yuzo Kano, who quit Goldman Sachs Group Inc. to open bitcoin exchange BitFlyer Inc. in 2014. “It’s possible that Mr. Wright was one of the people involved in the original bitcoin and there are in fact multiple Satoshis.”

Libertarian Roots

Bitcoin gained an early reputation as a tool for selling drugs and laundering money. The currency’s libertarian roots, with no central issuing authority and a public ledger to verify transactions, has become more mainstream with its adoption by merchants around the world. Its underlying technology has also drawn interest from banks including Goldman Sachs and Citigroup Inc.

Wired’s evidence for naming Wright as the currency’s creator includes 2008 blog posts discussing bitcoin, along with e-mails, transcripts and accounting forms that corroborate the link. The real Nakamoto proposed bitcoin that same year before the software was rolled out in early 2009.

Wired also cited a 2014 administrator’s report into Hotwire Preemptive Intelligence Pty., which indicated the e-payment software firm was backed by A$30 million ($22 million) of bitcoins owned by its managing director Wright.

‘Stash of Bitcoins’

Amid the speculation, bitcoin climbed on Wednesday to hit its highest levels since early November. The reports mentioned a legal arrangement that keeps a very large chunk of 1.1 million bitcoins locked up in a trust until 2020. That would remove the risk of a big supply hitting the market anytime soon and driving down the price.

Wired reported that whoever is the real Nakamoto “appears to control a stash of bitcoins easily worth a nine-figure fortune.”

If that person is Wright, he doesn’t appear to have been spending it on an opulent lifestyle. His modest home in the Sydney suburb of Gordon lies in a quiet tree-lined street about 13 kilometers from Sydney’s central business district.

Wireless Hacking

Police raided the house on Wednesday as they assisted an investigation by the Australian Taxation Office. The raid was unrelated to media reports about Wright’s possible involvement in bitcoin, the police said.

Wright’s LinkedIn profile listed time working for ASX Ltd., operator of Australia’s biggest stock exchange, as well as OzEmail, one of the country’s first Internet service providers. Under education, it shows multiple Master’s degrees, a PhD in computer science and a doctorate in theology.

A message sent to the profile wasn’t returned and information from the profile such as work history and education has been removed since Wired’s report. The same person is listed as a lecturer at Charles Sturt University, specializing in encryption, cybercrime and wireless hacking. The university’s media office didn’t provide a phone number for Wright’s office and e-mails sent to his university address bounced back.

A woman who answered the phone at DeMorgan on Thursday said neither Wright nor Ramona Watts, reported by Gizmodo to be his wife, were at the office and the company wasn’t interested in talking to anyone. Then she hung up. Watts didn’t return messages left on a mobile-phone number that was listed as hers on the company website.

‘Fabricated Evidence’

While the true identity of Satoshi Nakamoto has occupied some bitcoin fans, others such as Gregory Maxwell said knowing who started the currency doesn’t matter.

Maxwell, an early contributor to bitcoin protocol on software collaboration site GitHub, has doubts about some of the evidence cited by the publications in naming Wright.

“I’ve reviewed some of the evidence being used, and much of it is clearly fabricated,” Maxwell, who is also chief technology officer at cryptocurrency innovation firm Blockstream, said by e-mail. “It is unlikely that the evidence which cannot yet be shown to be true or false has merit.”

Previous Leads

This is not the first time a publication claimed to have found the elusive inventor. TheNew York Times and New Yorker magazine have both tried to find whomever is behind the pseudonym. In a cover story last year, Newsweek identified the real Satoshi Nakamoto as a California physicist, who denied the report.

Some fans would prefer Nakamoto’s true identity remain an enigma.

“The cloud of mystique surrounding bitcoin’s creation makes it all the more interesting,” Alex Waters, CEO of bitcoin payment processor Coin.co, said by e-mail. “That being said, I think the technology stands on its own as a product of great human achievement regardless of who held the pen to the white paper.”

http://www.bloomberg.com/news/articles/2015-12-10/bitcoin-s-creator-reportedly-living-suburban-life-in-australia

Astounding Rise in Passive Management

This year brought a lot of good news for those in passive management - 2015.

Passive is popular, that's for sure.

As Bloomberg's Eric Balchunas reported earlier, 2015 has seen a record $365 billion in net inflows to low-cost and passively managed index funds and exchange-traded funds (ETFs) at the same time that $147 billion has been withdrawn from active mutual funds. Unfortunately for Wall Street and active managers, Bank of America Merrill Lynch analysts led by Savita Subramanian suggest the trend will continue. 

"In the past four years, passive investments have gone from one-fifth of long-only assets under management to one-third today," the BofAML team said in a note. They added: "Passive funds still only make up about one-third of the U.S. large cap space, far from critical mass."

Here's a look at the flows into or out of active and passive funds since the end of 2008, with passive managers dominating. 

Despite this rapid increase for inflows to passive investments, it still makes up a small share of total funds, as Subramanian said. 

If active managers were delivering stellar returns, the trend might change. Alas, they haven't been.

According to BofAML, only 40 percent of active managers are beating the indices they are measured against. Those focusing on value plays have proven the most adept at beating benchmarks this year, while core managers have the lowest success rate, the bank said.

What could help turn this around?

According to the BofAML note, active managers tend to have a bias toward growth stocks, an aversion to foreign-exposed companies, and a preference for lesser-quality names, as measured by Standard & Poor's common-stock rankings. The funds will need to outperform in those areas to start having better luck against their benchmarks. 

http://www.bloomberg.com/news/articles/2015-12-30/these-charts-show-the-astounding-rise-in-passive-management

The Final Days of the Bitcoin Foundation?

With support dwindling, funds almost depleted, and ex-board members under criminal investigation, bitcoin’s pioneering advocacy group is a symbol for the digital currency’s growing pains.

Bruce Fenton, executive director at the Bitcoin Foundation, opened its Dec. 15 board meeting with a sense of urgency: “We need additional funds if we wish to retain employees.” The numbers didn’t look good. In two years, the foundation had seen at least $7 million evaporate. As of Nov. 30, its total assets stood at $12,553.06.

To sustain the Bitcoin Foundation’s operations, which have included lobbying, putting on conferences, and providing technical support for the digital currency, Fenton urged the group to find ways to raise money quickly. They considered cold-calling ex-members, and Fenton said he’s working on marketing materials for prospective donors to explain the organization’s purpose. “There is no material saying what the foundation does,” he said.

Eventually, Jim Harper, a board member and senior fellow at Cato Institute, a think tank, interjected. He questioned whether the foundation was offering its members enough value to warrant its existence, according to minutes released on Dec. 21 from the meeting. “Asking for money is just throwing money away,” Harper said. Olivier Janssens, another director, suggested that the organization may not be “fixable.”

The Bitcoin Foundation has become a symbol of the challenges facing the digital asset it was designed to steward. While advocates have promoted bitcoin as a global, decentralized currency for the Internet age, it’s proved to be more volatile than many penny stocks. Its role in money laundering and other illegal activity is a constant source of questions, and the price fluctuates with each regulatory clampdown or criminal investigation. In November 2013, it reached a high of $1,137 before falling to $183 in January 2015 following a slew of problems, including the collapse of Mt. Gox, once the world’s largest bitcoin exchange.

Police officers carry pieces of evidence from the house of Mark Karpelès, head of defunct Bitcoin exchange Mt. Gox, in Tokyo on Aug. 3.

 

Photographer: Jiji Press/AFP/Getty Images

Beyond financial trouble, two former Bitcoin Foundation board members have been charged with crimes. Mark Karpelès, former chief executive officer of Mt. Gox, wasarrested in Tokyo and charged with embezzlement in September. Charlie Shrem, former vice chairman of the Bitcoin Foundation, resigned before pleading guilty to helping launder money for transactions through the illicit online marketplace Silk Road. He’s currently serving two years in a federal prison.

Several people still involved with the Bitcoin Foundation said the wounds may never heal. “I don't know if the foundation has a future,” Gavin Andresen, a former board member who now holds the title of chief scientist, wrote in an e-mail. “It is very difficult to regain trust once trust has been lost, and the illegal behavior of two of the foundation's former board members destroyed a lot of trust.”

When the Bitcoin Foundation was formed in 2012, the group was intended to give legitimacy to a relatively unknown technology. By the end of that year, bitcoin traded at about $13. The organization grew almost in lockstep with the popularity of bitcoin. Comprising pioneering coders and entrepreneurs behind the digital currency, the Bitcoin Foundation would soon become a familiar face in Washington, spreading the gospel of bitcoin around the world.

U.S. lawmakers and congressional committees appreciated having a central figure to represent bitcoin, but foundation members have sometimes become punching bags for politicians. At an event in 2013 attended by Andresen, who was appointed to lead bitcoin development by the anonymous creator, Satoshi Nakamoto, a Justice Department prosecutor compared bitcoin with child pornography, according to a reportin the Washington Post.

A man named Satoshi Nakamoto, one of many people believed to be the creator of bitcoin, fends off photographers. He's denied involvement.

 

Photographer: Allen J. Schaben/LA Times via Getty Images

Techies bought into the promises of bitcoin and were eager to donate to further its cause. At the end of 2013, the Bitcoin Foundation reported $7 million in assets, according to meeting minutes. As demand for bitcoins rose, so did the value of the foundation’s funds, much of which were held in the digital currency. In 2014, its ambitions began expanding with the addition of a lobbying operation in Europe.

Then things changed. By mid-2014, funds were down to $4.6 million, and the burst of the bitcoin bubble that year took a toll on the foundation almost immediately. “I hired lobbying in Brussels in 2014, and then we scaled it right back because the money was gone,” Harper said in an interview after the contentious Dec. 15 board meeting. According to the minutes from that meeting, the organization has cut its budget by 95 percent from previous years. Its conference business now faces stiff competition from other events, such as Inside Bitcoins and Money20/20.

About a year ago, when bitcoin’s price had fallen to about $374, the foundation said it would discontinue public policy efforts and concentrate on providing technical development to bitcoin. The reason was simple: It didn’t have the money to do both. “It thrived while the bitcoin price was rising, so it never put a plan in place to sustain it,” Harper said. “When the price dropped, the foundation ran out of money. The last year has just been cutting costs, shrinking budgets, bringing things under control.”

The pressure revealed the foundation’s underlying weaknesses. Supporters were inexperienced at raising money, and until recently, few paid attention to expenses, Harper said. “They were spending thousands of dollars per month on Web services that would have cost a couple hundred,” he said. Bobby Lee, a Bitcoin Foundation board member, referred questions about expenses to Fenton, who didn’t respond to a request for comment. In a further e-mail, Lee acknowledged “budget and leadership problems in the past.”

Bitcoin has weathered hard times better than the foundation has. The price is back up to $426. Venture capital firms have invested more than $1 billion in bitcoin-related startups, according to research from CoinDesk. Finance and tech companies, including IBM, Overstock, Nasdaq, and the biggest banks, are experimenting with the technology for use in everything from money transfers and contracts to issuing stock. Coin Center, a year-old organization with backers such as BitPay, has staff in Washington developing bitcoin policy. There’s also the Digital Chamber of Commerce, a trade association. Those two organizations recently formed the Blockchain Alliance to help law enforcement investigate criminal activity involving bitcoin’s underlying technology.

Roger Ver, whose evangelism for the digital currency earned him the name Bitcoin Jesus, provided the Bitcoin Foundation with funds early on. An ex-convict who had been sentenced to 10 months in federal prison after selling about 14 pounds of explosives without a license on EBay, Ver said the foundation’s demise, if it were to happen, wouldn’t affect bitcoin. “There are lots of different bitcoin foundations, so the name may change, but the mission will carry on,” he said. “I don’t think it matters at all if the Bitcoin Foundation were to close. The Bitcoin Foundation laid the groundwork for the ecosystem that we have today.”

But Lee is determined to resuscitate his organization. “Despite the recent negativity about the Bitcoin Foundation, there are still many people who believe in the need for a global non-profit platform that advocates for bitcoin,” Lee wrote in an e-mail. “The past 18 months were tough for bitcoin and its entire ecosystem; I did not give up on bitcoin then, and I will not give up on Bitcoin Foundation today.”

At the December board meeting, Lee suggested that dissenters should resign. “If someone does not want to be on that ship, they should step off the board,” Lee said. After much debate, Janssens and Harper elected to dissolve the organization, but they were outvoted by Lee and the two other directors.

By the end of the meeting, Harper agreed to step down, and Janssens was removed from the board. “None of this is personal,” said Chairman Brock Pierce. The two ousted men were dismissed. “Don’t thank me,” Janssens said. “I was removed for a bulls--- reason.”

On Dec. 22, the Bitcoin Foundation said it appointed three new board members. The foundation is also considering a revised mission statement, with a focus on technical development, advocacy, and regulatory efforts. Finally, the board “voted to continue the existence of the foundation” and established an optional board seat for bitcoin’s mysterious creator, “if and when Satoshi ever reveals him or herself.”

http://www.bloomberg.com/news/articles/2015-12-30/the-final-days-of-the-bitcoin-foundation-

This Island Says Everything About Australia's Shifting Economy

On the largest island in Australia’s Great Barrier Reef World Heritage Area, $60 billion of liquefied natural gas terminals are helping feed China’s hunger for energy. The next major construction project may appeal to its tourists.

Four decades after his father bought a cattle property on Curtis Island, American businessman Tim Reigel is seeking government approval to turn it into a five-star holiday destination. It’s the latest chapter for the 30-by-15-mile strip, located beside the famous coral reef, which state authorities predict will become one of the world’s largestLNG hubs.

The gas-to-guests transition is a microcosm of the economic shift happening in Australia. The nation, at the tail end of the biggest resources boom since the 1850s Gold Rush, is counting on tourists, especially from China, to help soften a plunge in mining and energy investments. These days, the majority of people coming to the tropical isle are there to help build the LNG facilities, not for the pristine beaches or endangereddugongs and snubfin dolphins. Once the projects are completed, most of those workers will leave.

“LNG is a tiny part of the Curtis Island story,” Reigel said by phone from his Los Angeles home. “I don’t care how many billions they’ve spent on it. Most of the island experience is very divorced from that.”

Yellow Patch, Curtis Island.

 

Source: QRE Pty

The three LNG projects on the island, about twice as big as Martha’s Vineyard, occupy about 2 percent of the land area on its southwestern tip, a couple of miles from the central Queensland port town of Gladstone.

The island’s workforce has already halved from a peak of 14,500 people last year and will drop to a “very small number” next year, according to contractor Bechtel Group Inc. The last project, a ConocoPhillips-Origin Energy Ltd. venture, is due to begin production this month.

The exodus is hurting local businesses, such as Scotties restaurant, two blocks from the harbor, which once counted among its clientele directors of BG Group Plc, operator of the $20 billion Queensland Curtis LNG plant. The U.K. company said Wednesday that the second stage of the plant’s development is finished.

“I had three fantastic years, like everyone else, when all the big guys were coming to town -- the engineers, the executives,” owner Scott McCarthy said. “Now, it’s been going downhill at a rapid pace. What we need is another big project to be announced, but with the commodity markets being as low as they are, that’s probably not about to happen.”

Cheaper Holiday

Fresh sources of income are needed to fill the gap, said Janu Chan, an economist with St. George Bank Ltd. in Sydney. Tourism may help, especially after the Australian dollar slipped against all but three of the Group of 10 currencies in the past year, making it cheaper to holiday in Australia for most overseas visitors.

Nearby Gladstone, originally named Port Curtis, is starting to woo travelers. Carnival Corp.’s P&O Cruises is scheduled to dock there six times next year, enabling passengers to visit the reef or even take a boat tour of the LNG plants, said Mayor Gail Sellers. Still, she’s not counting on Curtis Island drawing crowds of vacationers anytime soon, she said.

Yellow Patch

Unlike the Whitsunday Islands, about 600 kilometers further north, with their white-sand beaches, azure water and dense rain forest, the island that English explorer Matthew Flinders landed on in 1802 is more rustic and rugged. Among its features are a 20-story-high sand dune, called Yellow Patch, tranquil billabongs and flatback turtle nests.

Its raw beauty may pose a challenge to resort developers, said Graham Reynolds, a Brisbane picture framer who wrote a book about Curtis Island’s history.

“Perhaps you might get clever operators who can wrest some of that latent charm out of the place,” said Reynolds, who spent part of his childhood on the island, where his uncle was a maritime pilot.

Universal Partners BV, a Dutch real estate investment company, had planned to develop the northern tip of Curtis Island, which it said was the largest freehold, or non-leased, island-property in Australia. The plan didn’t gain traction with state and local governments and was shelved almost a decade later, said Rob Johnson, a designer who worked on the project and is now based in Jakarta.

Luxury Villas

“Sooner or later there will be a resort on Curtis Island,” said Reigel, who is pushing ahead with his plans for Turtle Street Beach Resort, a A$100 million ($72 million) project featuring 177 luxury villas and apartments, tennis courts, pools, a bar and restaurant. The proposal has drawn interest from Chinese investors, he said.

If approved by the Australian government, design work could begin immediately with the first stage of construction finished by the end of 2017, according to documents that Reigel’s company, QRE Pty, filed last month with environment authorities. 

Reigel’s father, Bill, a former stockbroker, led a group of U.S. investors that acquired the cattle property, Monte Christo, in the mid 1970s with the goal of building a resort there. The proposal stalled in the 1980s, while the government considered setting up a naval base on the island.

In 1989, three years after his father died, Reigel started the effort to obtain state and local government clearance, the filing shows. The plans have been tied up in a “complex” approvals and negotiation process with government agencies since, while about 14,000 hectares have been given up for national and conservation parks.

Tourism Drive

The impetus for tourism developments is increasing. The Australian government estimates thousands of extra rooms are needed in capital cities and in Queensland state to meet its target of doubling visitor spending to as much as A$140 billion by 2020, and investors are responding. The country has the strongest hotel pipeline in more than a decade, said Karen Wales, senior investment specialist at the Australian Trade Commission.

Current projects in Queensland include the A$600 million redevelopment of Lindeman Island and plans by Aquis Group, controlled by Hong Kong developer Tony Fung, to build an A$8 billion casino-resort with 7,500 rooms on a former sugarcane farm north of Cairns.

Although industries outside minerals and energy are helping the economy, they are unlikely to plug the investment hole that resources companies have left, St. George’s Chan said. Resources-related infrastructure projects total more than A$90 billion in the Gladstone area alone.

“We’re a fly on an elephant’s behind in terms of the size and type of projects that happen around Gladstone,” Reigel said. “But the role we fill is helping to provide diversity to the industrial base.”

http://www.bloomberg.com/news/articles/2015-11-25/mixing-mojitos-and-gas-on-barrier-reef-is-australia-s-new-normal