In case if you havent heard about the digital currencies Bitcoin and Ethereum, in the last three months Bitcoin value has risen exponentially to 150% and more than 400% in the last 1 year alone. Demand for crypto currencies soared with the creation of new tokens to raise funding for start-ups using blockchain technology.
New Kids on the Block
Lots of News Kids who are very new to financial markets are involved in such kind of transactions and the numbers keep increasing. New Bitcoin investors are quite crazy about investing in bitcoins, one of the reason why there is a positive feedback loop formation in digital currency. No one have any easy clue about how to value this asset class and none seems to care when comes to bitcoin valuations!
Is it yet another Tulip Mania?
Strong demand from Japan and South Korean people fueled Bitcoin price raise to exponential highs and that sound like a yet another Tulip Mania as bitcoins cannot be backed by any government and can’t be physically held in your hands. Lots of Indians are seems to be involved despite RBI alerts on virtual currencies.
“An investment of $1,000 in bitcoin in 2010 would be worth more than $73 million today.” These are the kind of statements that make people to believe and take crazy extrapolated bets.
Media shows love towards exponential growth
Some people in the FB are not convinced with the Bitcoin valuations so they are investing in other digital currencies like altcoins, Dogecoins as if it is going to be the safest asset class to invest.
New people are flocking into Bitcoins
Zebpay becomes the 7th most popular app in Apple App store in Finance 🙂 pic.twitter.com/entYvqwQWL
— zebpay (@zebpay) May 27, 2017
We are experiencing the most significant surge in web traffic since our inception. #IndiaBitcoin
— Unocoin (@Unocoin) May 26, 2017
No one knows the real impact when the bubble starts crashing. This is a real bubble stay away from it!