Sometimes it pays to play it safe.
For the last few years, tech-minded investors have raved about “cryptocurrencies.” These digital forms of money have been growing more and more popular. Perhaps you’ve heard of Bitcoin? Yeah, there are many other similar currencies that are used around the world.
And many have made fortunes off the craze. Many who invested thousands in 2010 have made millions. But now investors are racing to get in on the hot commodity.
The secure currencies are popular among online marketplaces. They are hard to hack or exploit. They’re a favorite among users who like to trade online, without fear of being tricked.
Yet in recent years, they’ve become hot among investors and conspiracy theorists. People have dumped quite a bit of real cash into the systems–believing them to be better than the dollar, pound, or euro.
But, as with all fads, it looks like the cryptocurrency bubble has finally popped.
THE cryptocurrency market has lost $US206 billion overnight in what traders are describing as a “cryptocalypse”, with bitcoin heading back towards its $US10,000 milestone first reached last November.
But it was smaller currencies including ripple, ethereum and bitcoin cash that were the hardest hit in the latest sell-off, which was sparked by fresh fears of a crackdown on virtual currencies by governments in South Korea and China.
At the time of writing, ripple was down nearly 50 per cent on the previous day, ethereum had lost nearly 34 per cent of its value, bitcoin cash was down nearly 37 per cent and bitcoin was down 27 per cent to just under $US10,200…
“It’s been a cryptocalypse overnight with bitcoin and other virtual currencies coming under heavy selling pressure as the regulatory scrutiny intensifies not only in China and South Korea but across the globe,” Greg McKenna, chief market strategist at AxiTrader, said in a note on Wednesday.
This is why most people invest in real things, like gold, land, and stable companies. Cryptocurrencies are very new. Governments are extremely wary about their impact on global economies. It comes as no surprise that China and others are cracking down.
For a few years, Bitcoin and others have gone unnoticed. But once they started dealing in the billions, you know that trouble was brewing.
Governments have yet to set rules regarding cryptocurrencies. How are they tracked? How will governments monitor them for criminal activity? And most importantly, how will they be taxed?
All this is still being decided. Because of the uncertainty, investors got scared. So they sold off their Bitcoins like they were going out of style.
It remains to be seen whether or not cryptocurrencies will survive. In short, time will tell.