Skyrocketing bitcoin raises fears of asset bubble

https://www.rt.com/business/388440-bitcoin-rally-fears-asset-bubble/

The surge in the price of bitcoin has some worried that the world’s most popular cryptocurrency is an asset bubble in an unregulated market.

Bitcoin was trading close to $1,900 against the US dollar on the Bitfinex exchange on Friday, pushing the market value of digital currencies to break through the $50 billion mark.

An increasing number of alternative cryptocurrencies, amounting up to 830 “alt-coins,” is boosting the speculative shift with the price of some plummeting 500 percent over the past week.

The speculation among alt-coins has benefited anonymous payment systems employed by cyber criminals performing wide-scale attacks.

At the same time, growth in initial coin offerings (ICOs), which help blockchain startups to sell their tokens directly to the public to get capital without any regulatory oversight, is fueling the market, drawing attention from lawyers and economists.

Some experts are worried ICOs breach existing securities law.

“An ICO issues crypto tokens rather than stocks and bonds, but that’s irrelevant to the substance of the activity, which is raising capital from the general public. Capital raising activities need to be regulated to protect investors. The question is how sophisticated are these investors?” said PricewaterhouseCoopers director Ajit Tripathi, as quoted by the FT.

Last week, a German central bank board member warned the public not to buy bitcoin, as the bank doesn’t recognize it as a currency, and there are serious risks of facilitating speculation.

Last month, Japan moved to tighten regulations on bitcoin trading and dealing. The measure enforces bitcoin exchanges to register. This adds costs to their businesses due to the necessity to follow know-your-customer and anti-money-laundering regulations.

Bitcoin was trading at $1,743 against the US dollar at 2:46 pm GMT on Monday, retreating from record highs, according to XE Currency Charts.

———–

“Bitcoin was trading close to $1,900 against the US dollar on the Bitfinex exchange on Friday, pushing the market value of digital currencies to break through the $50 billion mark.”

spiraling upwards..but beware:

“Last week, a German central bank board member warned the public not to buy bitcoin, as the bank doesn’t recognize it as a currency, and there are serious risks of facilitating speculation.”

401

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~ by seeker401 on May 18, 2017.

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