[ad_1]
A recent survey of 500 institutional investors found that 64 percent predicted more cryptocurrency bubbles than a smaller number.(Getty Images)
Bitcoin recently passed its tenth birthday, having given some owners huge profits, other huge losses. It has not been in the news so recently because of a collapse from its all-time high over $ 17,000 a year ago to less than $ 8,000 last February. It opens around 2019 $ 3,700.
So, what did investors learn in the first 10 years? Will the journey be so wild in the next decade? Will the bitcoin extend its reach as a real currency for the purchase of meals and the payment of rent? It's important?
"I think that right now, those who should think about investing in cryptocurrencies should be those who have appetite for risk," says John Sedunov, assistant professor of finance at Villanova University School of Business.
The introduction of trading on future futures could help stabilize the market, making it easier for bearish traders to make bets, he says, but says that the currency is still too risky for ordinary investors. "Retirees and those approaching retirement should avoid these currencies at all costs because volatility is too high".
Supporters of cryptocurrency, however, see an expiring market.
"The 2018 bear market has taught many lessons," says Ofir Beigel, CEO of 99Bitcoins, an information site based in Israel. "I think speculators will be less reckless in the future."
Beigel states that "most market participants would be absolutely shocked to see a price below $ 2,000 bitcoins" and the price limit is unknown.
It remains very uncertain, including the key question if a cryptocurrency serves a necessary purpose. True believers see value in a truly market-based currency, free from interference by a central bank such as the Federal Reserve. The currency exists only as a digital ledger of transactions, with values set by supply and demand.
But security has been imperfect and occasionally coins are stolen – which is not the case with dollars in an insured bank. Because the transactions are anonymous and without restrictions from national borders, bitcoin has also become a currency of choice for criminals.
Ryan Singer, co-founder of Chia Network, another cryptocurrency, said that security outages were focused on trading and storage systems, not bitcoin's ledger blockchain system.
"Companies like BaseZero and Ledger are creating excellent tools for safe custody," he says. "Chia will support the widely updated features for safe custody and payments We are particularly excited about the use of Lightning on bitcoins … We call this technology" non-custodial exchange ".
Even though it was touted as an alternative currency, bitcoin did not exactly catch on for ordinary purchases, although use has spread to some 14,000 locations around the world, compared to 1,600 five years ago, says Sedunov.
Doubts observe that a real currency has a constant value. Bitcoin was instead an advantage for speculators. Much of the excitement instead focused on price peaks that produced fortunes for speculators who bought when the currency was traded for less than a dollar.
The price may rise or collapse on the thin end of a new regulation or adoption by a traditional finance company.
"There remains a lot of regulatory uncertainty," says Sedunov. "I think a lot of the future value of bitcoin depends on how countries like the United States, China and South Korea see and regulate cryptocurrencies."
While stock prices are largely governed by factors such as corporate earnings, the value of bitcoin is largely driven by uncertainties such as what someone else might pay for a little-used asset in the real world. Critics call the theory of fools.
Many financial advisors do not know much about cryptocurrency trading, but it is likely that it will change, bringing these resources into the mainstream, says John Wagster, co-chair of the blockchain and digital currency team at Frost Brown Todd, a law firm advising customers on cryptocurrency.
"It may be acceptable for an investment advisor to tell an investor at the end of the year that the consultant has chosen not to purchase a publicly available investment that has increased in value 20 times because the investment was too risky" , He says. "But it is not acceptable for an investment advisor to say that he did not invest because he did not understand the opportunity."
Advocates have long argued that bitcoin values will be amplified by limited supply, as the underlying process limits the total number of bitcoins that can be created. But there is some discussion about whether it is all that is broken because money can be bought and sold in small fractions. If a tenth of a coin can one day have the value of a whole bitcoin, is the supply really limited? Those who answer no, this puts out one of the legs of the stool.
To be really useful as a currency, bitcoin clearly needs broader adoption, which may not happen until the whipsawing value makes it difficult for a trader to set a price. Should a new car be advertised at 10 bitcoins or 50? Price changes are so rapid that a price published on Monday may be too high or too low on Tuesday.
A recent survey conducted by 500 institutional investors by Natixis Investment Managers found that 64 percent predicted more cryptocurrency bubbles than a smaller number.
Kyle Asman, partner and co-founder of BX3 Capital, a business consultant who helps companies penetrate the blockchain and cryptocurrency sectors, believes that regulation will help stabilize the market.
"From our discussions with members of Congress, it seems likely that a light regulation law will pass in mid-2019. This will be the regulatory framework for cryptocurrency advancing," he says. "While important institutional actors such as pensions, endowments and sovereign wealth funds are starting to invest in digital assets, we will see more liquidity and much less volatility in cryptocurrencies".
Asman does not believe that bitcoins will be widely used for ordinary purchases and sales, noting that at the moment it takes 20 minutes to complete a retail purchase. But challenge those who say they do not have a place as a long-term investment.
"Right now, bitcoin is a great choice for IRAs or 401 (k) for those between 20 and 30, because price fluctuations will now not have an impact on price from 40 to 50 years," he says. "For someone who is approaching retirement now, however, it may be a bit too speculative for their wallets."
Jeff Brown, Collaborator
Jeff Brown, a freelance writer based in Livingston, Montana, wrote about investing t… Read moreJeff Brown, a freelance writer based in Livingston, Montana, has written about investment issues for US News & World Report since 2015. He spent 32 years as a reporter, editor and columnist at five newspapers, including 20 at The Philadelphia Inquirer, where he he was a personal finance columnist for 12 years before becoming a freelancer in 2007. In addition to US News, Jeff wrote about investment and personal finance for the Wall Street Journal, the New York Times, the Washington Post, MSNBC.com, CNBC .com and numerous other stores. Raised in the suburbs of New York, Jeff graduated from Kenyon College in Ohio in 1974 with specializations in political science and English, and worked and lived in New York, North Carolina, Virginia, Minnesota, Texas and Pennsylvania. He moved to Montana in 2014 to build a log home in the Bobtail mountain range overlooking Bozeman. It can be found on LinkedIn.
