Bitcoin mania: Join the rush or beware the bubble?
Bitcoin’s meteoric rise in value this year has outstripped even high-performing technology stocks tempting more investors to capitalise on the volatility while others steer clear fearful of a crash
When the Wall Street Journal’s headline reads Bitcoin: Even Grandma Wants In On The Action you can’t ignore it.
Bitcoin’s price swings have been prompting volatility-starved investors to join the biggest speculative boom since the 1990s dotcom fever.
Just six minutes into Bitcoin futures trading, the contract expiring in January which opened at $15,000 rose to $16,600. Trading on Monday morning (December 11th) in London the contract was changing hands at $17,500. Bitcoin itself was at $16,635.05 according to CoinDesk. Right now there is no hotter ticket having started 2017 at $968.23.
Is Bitcoin a bubble?
Investment is being tempered by the fear that Bitcoin’s value is speculation driven. They’re wary of putting money into a bubble.
Some are convinced it’s the future. John McAfee – founder of the eponymously named software – doubled down on his previous prediction and claimed: “I’ll eat my own d**k on national TV if Bitcoin doesn’t surpass $1 million by 2020.”
More investors are setting aside Bitcoin’s questionable past and use by criminal elements. Some see it as a viable alternative to gold as an investment. Especially when faith ebbs in fiat currencies.
‘Millions of active Bitcoin users’
“We now have millions of active users,” said Peter Smith, chief executive of Bitcoin services firm Blockchain.info. “We didn’t have a million last year.”
Bitcoin’s meteoric rise has seen interest increase in other cryptocurrencies like Litecoin, Ethereum, Dash and Ripple. Microsoft are reportedly exploring Ripple’s Interledger protocol for their own blockchain toolkit offering.
CME Group Inc., the world’s biggest exchange group, announced they were launching a Bitcoin futures contract next week. Goldman Sachs Group Inc. has also fuelled interest further by announcing intent to introduce products based on the virtual currency. Who knows what the price will be when these financial instruments kick in.
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