Analysts note - there are signs that the crypto currency is a bubble, but the capitalization of the major digital currencies is noticeably less than that of the leading companies, so the likelihood of the collapse of Facebook, Apple and technological startups is more critical.
The market of crypto-currencies is developing, parabolic figures on the charts instill just fears in investors, but their appearance does not mean that the full potential of development is realized.
Who is interested in the crypto currency bubble?
Early investors drew attention to the market a few years ago. Today they own 40% of BTC. Whales benefited most from the growth of the Crypto-currency in December, after which they hastened to transfer part of the assets to Fiat at peak values. Milleniales, who bought bitcoin at an inflated cost, suffered.
✅The market is still too small, whales can easily manipulate the price. This distinguishes the current correction from what happened before. If the world powers in the summer recognize crypto-currencies as assets, the price bubble may burst, but this does not mean that the direction is hopeless or that the market will not recover from the blow.
"Many potential representatives of the community warned about the possible drop in the value of crypto currency to zero, including Vitalik Buterin and Brad Garlinghouse. Creator Lightcoin Charlie Lee sold assets in December. All of them did not hide that they did not approve of the speculative inflation of prices. A burst bubble can cross out the prospects of truly worthwhile projects, their founders are interested in stability.
✅News about the bubble appear more often during a sharp decline. Their target audience is novice investors, who sell their assets at a loss under the influence of emotions. It is worth checking the data on wallets from the top 100, as it becomes clear who is the most profiting during each crisis.
Investors do not believe in a bubble?
The recent London conference on crypto-currencies has attracted a lot of enthusiasts - the seminars came to listen to scientists, pensioners, students and professional traders. Even the sharp decline, recorded this week, did not cause to talk about a bubble.
Some participants calmly refer to losses, considering that the most successful financial strategies are developed by those who at the very beginning failed:
If you want to deal with crypto-currencies, it will be better to lose money on the first deposits.
Negative experience teaches people to be cautious, but mistrust of banks sometimes plays a cruel joke on them. After the crisis of 2009 it became clear that it is impossible to insure against bubbles. According to Anstey, investor interest in ICO is associated with other risks:
There is no board of directors, there are no managers and auditors, and there is no clarity about the plans and purpose of the funds.
Despite the indecisiveness of institutional investors from Wall Street, many speakers at the conference were convinced that it was not worth talking about the bubble:
Soon the Silicon Valley will wake up and realize that crypto-currencies are an excellent tool for conducting banking activities.
It is noteworthy that the capitalization of both sectors is approximately at the same level. For crypto currency it is today 288 billion, technology is estimated at 298 billion. Although the triple reduction in cost was painful, it is not worth talking about a bubble. A similar crisis in 2015-2016 experienced and technology. Analysts agree that new heights for crypto-currencies should not be expected in 2018, but now promising projects may appear.