Bitcoin bomb?

£1 is currently equivalent to $54,018 can that be right?

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Bitcoin – scam or sensation? (Birmingham Post article 21.12.2017)

January 22, 2018 by Robert Kenyon

Bitcoin has been generating publicity and added value in almost equal measure.

Having risen dramatically, the cryptocurrency is a phenomenon lauded by fans.

But some countries have banned it, some regulators have put out warnings and some financial services experts have condemned it.

This autumn JP Morgan chief executive officer Jamie Dimon threatened to fire any staff member who traded it.

He said: ‘You can’t have a business where people are going to invent a currency out of thin air. It’s a fraud and honestly I’m just shocked anyone can’t see it for what it is.”

And Nouriel Roubini, the American economist who predicted the 2008 financial crash, cautioned: “There is a gigantic speculative bubble related to bitcoin because this is neither a serious method of payment nor a good way to store capital.”

There was no fundamental reasons for its price explosion, he maintained.

Ron Insana, a commentator with CNBC, pointed out that bitcoin’s daily volatility was in the region of five per cent to 10 per cent.

He went on: “Convertibility is suspect in some nations where bitcoin exchanges have been banned, creating confusion as to how the currency can be used.

“Complicating all that is the use of cryptocurrencies in the ‘dark web’ for a wide variety of illicit activities, from money laundering to drug dealing to prostitution, among others.

“The episode, for some, will end badly while others reap the rewards of getting in on the action early and, more importantly, getting out before the bust.”

The Financial Conduct Authority warned earlier this year on the speculative pricing in cryptocurrencies, specifically highlighting initial coin offerings where market volumes have exploded as celebrity endorsements from the likes of Paris Hilton and Floyd Mayweather caught the public’s attention.

It described these as “very high risk investments”.

It added that some projects touting the future exchangeability of crypto-tokens may be outright scams.

However, a report from the Cambridge Centre for Alternative Finance (CCAF) said cryptocurrencies – defined as digital assets using cryptography to secure transactions between peers without the need for a central bank or other authority – are increasingly being used, stored, and transacted.

It stated: “We estimate there are at least three million people actively using cryptocurrency today.”

Dr Garrick Hileman, research gellow at CCAF, argued: “Cryptocurrencies such as bitcoin have been seen by some as merely a passing fad or insignificant, but that view is increasingly at odds with the data we are observing.

“Currently, the combined market value of all cryptocurrencies is nearly $40 billion, which represents a level of value creation of the order of Silicon Valley success stories like Airbnb. The advent of cryptocurrency has also sparked many new business platforms, along with new forms of peer-to-peer economic activity.”

Nigel Green, founder and chief executive of deVere Group, added: “The meteoric rise of bitcoin underscores the demand and the need for digital currencies in today’s world.

“The already considerable marketplace for cryptocurrencies is growing and that it is likely to only grow at a faster pace in coming years.  As such, Jamie Dimon’s steadfast dismissal of bitcoin is totally wrong.”

But he also noted: “Whilst many bitcoin investors are popping the champagne corks at the moment, some caution needs to be exercised too.

“Bitcoin remains a major gamble. But that said, the US dollar is also a gamble.  America has 23 trillion in debts, so some would argue that its currency is also a risk.”

Enthusiasts believe bitcoin is capable of becoming a new Google or Facebook.

Safe to say that anyone investing in it and the entities it has spawned should be extremely circumspect.

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Published by technofiend1

Kazan- Kazan National Research Technical University Казанский национальный исследовательский технический университет имени А. Н. Туполева he graduated in Economics in 1982

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