At the start of the year, Bitcoin’s price ranged somewhere between $900 and $1,000. Now, the digital currency is well over $7,000 ,up more than 600% in 10 months. In Zimbabwe, the cryptocurrency blasted to $12,400 on Halloween, making it a genuine El Dorado for those looking to make profit from the situation. And people are again asking themselves – is it just another bubble ready to burst at any point?
A lot of people still have their doubts
Investment strategists and financial advisors certainly believe so, and that’s why they’ve issued warnings, saying that Bitcoin is not to be trusted. “A month before the 1987 crash, my cab driver said he started day trading. A month before the real estate crash in 2007 in Arizona, my cab driver said he was getting into flipping real estate. Last week, my Uber driver said he just started trading Bitcoin,” said Scott Kelly, CEO of Black Dog Venture Partners in Phoenix, Arizona, associating these events.
And Kelly is right regarding at least one point – Bitcoin has gone mainstream and the crowd is piling in. Especially after CME Group announced last week that it will create futures products based Bitcoin.
Stories of overnight cryptocurrency millionaires are everywhere and lessons on how to make tons of money are almost free. But how real are these tells?
Is the cryptocurrency actually a fraud?
Members of the business and economics communities shout that Bitcoin is a fraud, a bubble that will eventually pop. JPMorgan Chase Chairman and CEO Jamie Dimon said that if you’re stupid enough to buy Bitcoin, you’ll someday pay the price. He added that the only value a digital currency has is what the other guy will pay for it.
Billionaire investment manager and Nobel-Prize winning economist Warren Buffet warned people to stay away from Bitcoin, because it’s only a mirage, a method of transmitting money.