It's easy for even the most stalwart investors to get swept up in the hype surrounding digital currencies. At its peak, bitcoin prices reached nearly $20,000 per coin in December 2017, constituting a gain of 2,000% from the beginning of the year. Other digital currencies followed suit, with ethereum and ripple seeing even greater percentage increases for a similar period.
And yet, heading into 2018, many top cryptocurrencies have slumped significantly. To put this in perspective, Quartz acknowledges that even BlackBerry (BB), the mobile-phone maker which has been a virtual non-entity in light of the tremendous popularity of Apple's (AAPL) iPhone, has been a better bet.
One-Month Return Sees Major Discrepancy:
For the one-month period leading up to January 18, 2018, bitcoin returned -43%. In contrast, BlackBerry brought in 25% returns.By comparison, ethereum had made gains of 40% for the same period, while the S&P 500 Index returned about 4%.
Although bitcoin has made recent gains once again this week, alongside gains by other digital currencies, they have so far not been enough to even out those returns. Specifically, bitcoin has yet to catch up with BlackBerry's 20% gains in the last month.
BlackBerry Has Reinvented Itself
BlackBerry used to be synonymous with smartphones in corporate landscapes. Now, the company has reinvented itself as a software and services agency with an emphasis on cybersecurity. It includes the U.S. Department of Justice among its clients, thanks to its ultra-secure messaging platform.
Does this mean that BlackBerry is the wave of the future and digital currencies are a thing of the past? Hardly. However, it does suggest that it's worth maintaining perspective about the hype surrounding cryptocurrencies.
Bitcoin has seen major declines in the past which then resulted in comebacks, and it is still up about 1,000% over this time last year. Although the past month has been tough, digital currencies (and the blockchain technology which undergirds them) continue to be of great interest to investors around the world.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.
