Bitcoin - a bubble, popping soon.
Cryptocurrencies have become an internet phenomenon taking over the digital marketplace by storm since it's inception in 2009, by a mysterious modern day Samurai Satoshi Nakomoto, called Bitcoin. As of today there are close to 1000 cryptocurrencies in existence. No, I'm not kidding. Any tech savvy enthusiast with knowledge of block chain - the revolutionary technology behind Bitcoin - can use the open-source software to start mining their very own digital tokens for transacting online and with the support of community members through peer-to-peer networking, turn it into the next big cryptocurrency fad. The reason behind their recent popularity escalation has been their exuberant valuations.
Bitcoin's value was less than a dollar when it all started in 2009. With rising popularity probably due to recession that followed GFC and possible threat of another such event happening again and eventual collapse of Fiat currencies, just like gold, Bitcoin would be the safe haven. So it's value started to soar as more and more people took interest and started investing in Bitcoin rather than using it as medium of exchange. Bitcoin, like any other commodity, is not beyond the ambit of supply and demand. There is a limit to the number of Bitcoins that can ever be mined, which is capped at 21 million, out of that approximately 17 million have already been mined. And after every four years of production, starting in 2009, it's production is halved for the next four years, like an inverse pyramid, the rest 4 million will be mined over the next 24 years. This is what is behind the crazy jump from less than $1 to $4565.43 as of today, creating millionaires in the process. Everybody wanted in on it, this led to creation of it's virtual cousin Ethereum - said to be faster, secure and more technologically advanced than Bitcoin - and countless others.
The block chain technology behind these currencies has applications in fields of insurance, banking, real-estate, financial markets, cloud and many other industries. Recent project by Swiss financial services giant UBS, Utility Settlement Coin, has garnered much attention and many global banks are now part of this alliance working towards establishing a collateralized cryptocurrency backed by real assets , which would transform inter-bank settlements. The future for this technology is bright but that cannot be said for the Bitcoin itself with any certainty. Government of China's recent ban on Initial Coin Offerings as fund-raising for new ventures where shareholders are offered digital tokens instead of shares, is seen as an awakening that they pose a serious threat to economic stability. Other governments might follow suit.
Coming back to the title of our post "Bitcoin - a bubble, popping soon"; it's likely to pop sometime this November. And when it does we can expect the prices to correct at least 90% from high. This happened in 2013, from the peak of $1163 it dropped to $152, a whopping 87% correction. I will not be surprised if we see prices touching $5500 before it hits the pin. It could happen anywhere between the second and last week of November 2017. This time the carnage will be worse than 2013, as is the mania.
Bitcoin's value was less than a dollar when it all started in 2009. With rising popularity probably due to recession that followed GFC and possible threat of another such event happening again and eventual collapse of Fiat currencies, just like gold, Bitcoin would be the safe haven. So it's value started to soar as more and more people took interest and started investing in Bitcoin rather than using it as medium of exchange. Bitcoin, like any other commodity, is not beyond the ambit of supply and demand. There is a limit to the number of Bitcoins that can ever be mined, which is capped at 21 million, out of that approximately 17 million have already been mined. And after every four years of production, starting in 2009, it's production is halved for the next four years, like an inverse pyramid, the rest 4 million will be mined over the next 24 years. This is what is behind the crazy jump from less than $1 to $4565.43 as of today, creating millionaires in the process. Everybody wanted in on it, this led to creation of it's virtual cousin Ethereum - said to be faster, secure and more technologically advanced than Bitcoin - and countless others.
The block chain technology behind these currencies has applications in fields of insurance, banking, real-estate, financial markets, cloud and many other industries. Recent project by Swiss financial services giant UBS, Utility Settlement Coin, has garnered much attention and many global banks are now part of this alliance working towards establishing a collateralized cryptocurrency backed by real assets , which would transform inter-bank settlements. The future for this technology is bright but that cannot be said for the Bitcoin itself with any certainty. Government of China's recent ban on Initial Coin Offerings as fund-raising for new ventures where shareholders are offered digital tokens instead of shares, is seen as an awakening that they pose a serious threat to economic stability. Other governments might follow suit.
Coming back to the title of our post "Bitcoin - a bubble, popping soon"; it's likely to pop sometime this November. And when it does we can expect the prices to correct at least 90% from high. This happened in 2013, from the peak of $1163 it dropped to $152, a whopping 87% correction. I will not be surprised if we see prices touching $5500 before it hits the pin. It could happen anywhere between the second and last week of November 2017. This time the carnage will be worse than 2013, as is the mania.
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