the Bitcoin bubble

The Bitcoin bubble is rather unusual, because it is pure speculation. Prices go up today only because they are expected to go up tomorrow. An FT reader, in an online comment, expressed this very clearly:

Bitcoin is speculation pure and simple because everyone can deduce that it can have no long-term value since new cryptocurrencies can be produced infinitely and at better quality ….

 

Still, there can be no doubt that at least some bulls are playing in this market. The twin brothers Cameron and Tyler Winkelvoss, who run the digital currency platform Gemini Exchange, last Friday predicted that Bitcoin would rise by 10 to 20 times its current value. Did they say when this might happen, though? My source for this information is the Financial Times, which did not provide a date for their forecast.

For more information, see Philip Stafford and Gregory Meyer, “Prices soar as new bitcoin futures start trading“, FT.com, 11 December 2017 (gated paywall).

 

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