Bitcoin Bubble Watch: Currency Passes US$16,000, And The Pace Is Accelerating

The value of bitcoin, the digital currency that you probably just recently heard about, shot through the US$16,000 mark on Thursday. To put this in context: The currency broke through the $1,000 mark in February of this year.

If you’ve only recently come across it, bitcoin is a decentralized digital currency — there are no physical bitcoins, only ledgers stored in the cloud. No government controls the currency, and its use is anonymous. Bitcoins are created through software that “mines” them. This is done to create scarcity, giving the currency value.

And what value it has: Bitcoin has seen a 16-fold increase in price in 10 months.

And the rate of growth is accelerating at a breakneck pace. Earlier this year it took a few months for bitcoin to add another US$1,000 in value; in the past day it’s been adding that much every few hours.

Bet you wish you had bought some bitcoins a year ago, when they were trading under US$800.

But don’t feel too jealous, because we’re calling it, folks: This is a classic asset bubble. Prices are accelerating and are completely unsustainable. A correction is inevitable.

We’re not the only ones saying it. Nobel prize-winning economist Joseph Stiglitz told Bloomberg that he sees bitcoin as “a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down.”

Bitcoin update:

$0000 – $1000: 1789 days
***
$6000- $7000: 13 days
$7000- $8000: 14 days
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
$11000-$12000: 6 days
$12,000-$13,000: 17 hours
$13,000-$14,000: 4 hours
$14,000-$15,000: 10 hours
$15,000-$16,000: 5 hours

— zerohedge (@zerohedge) December 7, 2017

Stiglitz called for the cryptocurrency to be outlawed, because “it doesn’t serve any socially useful function.”

He’s not the only one who’s worried. Prominent financial experts such as Morgan Stanley’s former chief economist, Stephen Roach, and Goldman Sachs CEO Lloyd Blankfein have warned that bitcoin is a big, fat ugly bubble.

But not everyone sees it that way. The true believers say bitcoin can still be worth much, much more. MGT Capital Investment CEO John McAfee predicted recently that bitcoin will soar to US$1 million by 2020. He and others point out that there will only ever be 21 million bitcoins mined, implying that their potential value could be very high.

Fear of missing out

That belief that bitcoin could be worth much more could be justified, or it could be another sign of …read more

Source:: The Huffington Post – Canada Travel

      

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