The popularity of cryptocurrency has gone wild and brings the market exploding, the economic trend has persitently soar record-breaking value.
In fact, last April 1, 2017, the total market cap for all cryptocurrencies was slightly higher than $25 billion.
Furthermore, just roughly two months later, the cap exceeded $100 billion. In just over 60 days, the value of cryptocurrencies surged by 300 percent.
Recently, leading cryptocurrency, Bitcoin, has invaded headlines by climbing dramatically in value (it’s currently sitting around $2,600 USD, about 160 percent higher than its value in April).
However, Bitcoin hasn’t been alone in this extreme growth. The cryptocurrency market as a whole has spiked in value within the last few months.
While those already invested in Bitcoin might be celebrating, this jump is clearly reason to pause for anyone considering entering the market. Historically, what goes up super-fast must come down — at least when it comes to the stock market.
This has prompted many to call this rise a bubble, leaving investors to wonder when it will burst.
As the continuous trend economic expert has weighed the fate and explain the popularity cryptocurrencies’ receiving.
In an interview with Bank Innovation, cryptocurrency trader Jacob Eliosoff, who runs a Bitcoin-focused investment fund, said factor number one in the general price rise is just another of crypto’s periodic bubble[s]: citing dates of Nov 2013, March 2013, July 2011.
He also said, lots of coins which patently have no plausible long-term use case or value — the classic example is Dogecoin, an obsolete joke — have set new highs during this frenzy — a bad sign.
Meanwhile, Ian Bogost, an Author, professor, and game designer, has previously written about bitcoin for The Atlantic.
In his write-up, Bogost shared his view on the latest cryptocurrency surge in an interview with Mic, explaining how the investors themselves could cause a drop in value.
“We’ve seen with these sort of ups and downs, these small groups of mostly Chinese pools end up with more than 50% of the capacity. And we don’t know anything about these organizations. Are they state controlled? The moment [there is too much consolidation in the mining pools], then effectively the platform is dead, at least as a currency,” Bogost explained.
It can also remembered that room for doubt in looking for proof of the volatile nature of cryptocurrencies, specifically Bitcoin, started when Mark Cuban publicly criticized the currency.
After the billionaire entrepreneur claimed on Twitter that Bitcoin was in a bubble and not, in fact, a currency at all, the cryptocurrency dropped significantly in value, seemingly illustrating a fragile and unstable nature.
In the end, whatever the cryptocurrency will bring to shape the future of world’s finance industry, it is a must for all the investors to trace historical precedent and strictly imposed multi-level measure in crafting financial decision.