Is it life after bitcoin?

[ad_1]

At the end of 2017, cryptocurrencies were one of the most discussed topics in many festive dinners. The stories of seers who had accumulated fortunes in the wake of the vertiginous rise of bitcoins fueled euphoria. And, they said, there was more money easy to do.

Apparently, the bubble was already preparing to burst in December. Initially, supporters of cryptography said that it was just a "correction" and the ability to buy more. But as the 2018 progressed and prices fell further, enthusiasm dropped.

Bitcoin, the flagship cryptocurrency, lost more than three quarters of its value from its maximum of R264.825 on the local Luno stock exchange in December 2017. Today it traded at R58,452. According to CoinMarketCap.com, the combined market capitalization of all cryptocurrencies has fallen from $ 573 billion to $ 129 billion in 2018.

There are numerous reasons: panic selling, more stringent regulations and several high-profile hacks among them. But in any case, those who bought on top have felt the pain, and those who have avoided the frenzy must feel quite pleased.

"The bitcoin crash of 2018 was the biggest economic bubble of our time, surpassing the famous dot-com bubble," says Barry Dumas, market analyst of the Purple Group's GT247.com market.

Even today, says Dumas, "more and more investors are betting against cryptocurrencies" thanks to the introduction of derivatives that allow them to take short positions. "This does not necessarily mean that these customers do not hold bitcoins as a long-term investment, but rather that investors are capitalizing on short-term momentum," he says.

But Wayne McCurrie of FNB Wealth & Investments points out that bitcoin has always been prone to wild price fluctuations, and has plummeted over 50% a number of times.

To put things in perspective, the currency is still worth almost five times compared to two years ago. Bitcoin is likely to attack, says McCurrie, although many "copied" cryptocurrencies will fall along the way.

However, he says, "there really is only one rule for investing: diversifying".

Dumas says the nascent crypts market faces another uncertain year. "A fundamental challenge is the cost factor of mining and the use of energy used to extract bitcoins," he adds.

Reports say that more than 100,000 cryptocurrency miners (those who verify transactions and add them to the digital ledger) have closed and over a million servers have been disconnected. In general, bitcoin mining is profitable only when prices exceed $ 4,500. On average, it takes 1,300 days and almost 40,000 kW of electricity to extract a bitcoin, says Dumas.

[ad_2]Source link