Bitcoin zoomed past $17,000 (£12,615) during the Asian trading session, further increasing a jaw dropping, mouth watering, record-breaking run.
According to Coindesk.com, it has soared about 70% this week alone. Amazing times we live in indeed! But buyers must be warned that as it increases in value an increasingly high number of warnings suggest we may be looking at a very dangerous bubble. Everybody knows that bubbles are eventually going to pop.
As concerns mount, an industry group has warned plans to start bitcoin futures trading were "rushed through". In a choppy Asian session, the digital currency breached new highs before falling back to about $16,000.
I've been watching the FED go through QE1, QE2 and it seems that the printing will never stop. At least with bitcoin there'll only ever be 21 million of them right?
Critics have said Bitcoin is going through a bubble similar to the dotcom boom, but others argue it is rising in price because it is crossing into the financial mainstream.
I know for a fact that the dotcom boom was significantly larger in size by several orders of magnitude so to the above statement I'd just like to say.... You ain't seen nothing yet!
"Bitcoin now seems like a charging train with no brakes," said Shane Chanel, from Sydney-based ASR Wealth Advisers. The surging price of Bitcoin has been helped by the upcoming start of the futures market this weekend.
Most certainly a correction is in the cards so be careful and treat lightly at the moment... I'd say to everyone holding that now may be a good time to hedge your bets at bare minimum.
Bitcoin futures will launch on the Chicago-based Cboe Futures Exchange on Sunday. The world's largest futures exchange, CME, will begin its Bitcoin offering a week later. But the Futures Industry Association, which includes Wall Street's largest banks, brokers and traders, has written to the US regulator over concerns that the contracts were approved "without properly weighing the risks".
Be on the lookout for increasingly larger amounts of FUD as many traders would love to sell, promote a crash, buy back cheap and take the ride back up again!
It seems ironic that many big investors have been reluctant to pile into the cryptocurrency market unless it is regulated while the whole point it was created in the first place was to operate as an unregulated form of decentralized monetary exchange. The founding principles never really were designed for it to be regulated in the first place.
"Bitcoin remains a major gamble as it is very much an asset that remains in uncharted waters, we've simply not experienced this before," said Nigel Green, founder and chief executive of deVere Group.
"An asset that goes almost vertically up should typically raise alarm bells for investors."
Even a crash or a major correction is unlikely to pose risks to the global economy, some analysts say. While billions of dollars have been invested in Bitcoin, its $268bn total market value is still small compared to other asset classes.
The entire cryptocurrency market is still in its infancy as far as I'm concerned. Many will be made rich by its rise while some may be left out of the cold if they don't manage to contain their risk and exposure by spreading their risk across a wide array of asset types.
What do you guys think about this epic bull run? Where will we go from here? Is bitcoin due to hit 20k and hold or will we see a run back down to a four digit USD valuation?
Thanks for reading!
Source:
Bitcoin hits $17,000 as bubble fears mount - BBC
Image Source:
BBC