At the time of writing this article, Bitcoin and many related cryptocurrencies are teetering on the edge of a meltdown. While its popularity has surged in recent months, with Bitcoin's value surging 7-fold in 2017 despite being around since before 2013, few people have any clue about what they are doing when it comes to investing in cryptocurrencies and few fail to recognize its lack of intrinsic value -- the biggest red flag of an impending bubble. I almost made the foolish mistake myself of jumping into the fray; bubbles are often anticipated yet many people just don't care until its too late.
Let's take a look at some of the latest facts when it comes to cryptocurrencies:
Bitcoin miners are fleeing China and other Asian markets as they step up their crackdown on cryptocurrencies.
Dogecoin, a cryptocurrency based on a meme, was originally a joke — now it has a market cap over $2 billion. For some reference, Denny's (DENN) has a market cap of about $800 million and Etsy (ETSY) has a market cap just over $2.4 billion. At least these companies make products and offer services. A joke currency is worth almost as much as these? Does that make any sense at all?
Western Union got a bump after unconfirmed reports that it was considering using Ripple (another cryptocurrency) to facilitate its money transfers
Additionally, some of the notable experts and enthusiasts behind cryptocurrencies are worried that this could turn into the biggest bubble of all time, even larger than the tech bubble that crashed the NASDAQ back in the early 2000s and took it over a decade to recover.
According to NewsMax, "while traditional bankers like J.P. Morgan’s Jamie Dimon, Credit Suisse’s Tidjane Thiam and Goldman Sachs’s Lloyd Blankfein have described bitcoin in terms of a fraud or a bubble, the finance industry is also showing signs of getting into cryptocurrencies.
Proponents of bitcoin say its limited supply will protect its value, especially when central banks like the Federal Reserve expand the money supply during recessions. The Fed has been in a gradual tightening cycle for the past two years, and that followed a period of keeping interest rates at record lows since the 2008 financial crisis.
But many central banks, like the European Central Bank and Bank of Japan, are still flooding markets with liquidity, driving up the price of financial assets like stocks. And like bitcoin, the stock market is also being described in terms of a bubble."
To learn more on these options, CLICK HERE to read NewsMax's piece and CLICK HERE to read/watch Business Insider's ideas regarding this topic.
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