The problem with investing in bitcoin is that it instinctively feels too good to be true.
The largest cryptocurrency by volume is today worth 600 percent more than a year ago, rising from about $ 7,000 per bitcoin to $ 54,000 this week, one of the best-performing financial assets of 2020 by the way. has been made. Despite the inclusion of some extreme price swings, the year-long rally so far has raised fears of a repeat of Bitcoin’s spectacular price crash of 2016.
Eye-popping returns are making it difficult for hardened cryptocurrency custodians not to consider investing in bitcoin and many long-term doubts are crumbling. Jamie Dimon, the head of the American banking company JPMorgan, is just one of the major crypto bears who changed the boom in recent years. Recently emerged cheerleaders include Tesla’s chief Aon Musk and several billionaire hedge fund managers, who are convinced that as the digital equivalent of gold, Bitcoin’s exchange rate rises even more against traditional currencies.
So is bitcoin just a big Ponzi scheme or a real investment opportunity? Should you give in to the temptation to pile into retail investors? FT Money has spoken out to finance professionals inside and outside the cryptomarket and found that opinions remain increasingly divided. The recent stellar performance has changed some bears in the bull. But staunch ones have warned that a bubble that has grown up is still a bubble.
Even enthusiastic crypto fans are reluctant to wager their life savings on assets associated with hair-raising levels of volatility. Even among these enthusiasts, many limit their investment to 1-2 percent of their portfolio.
Even though cryptocurrency may have been the digital equivalent of gold in the long run, today they are providing a rich hunting ground to fraudsters.
Is it really different this time?
Since the beginning of January, the value of bitcoin has risen by 75% and in mid-April, it was the latest hit in the series of record highs at $ 65,000. Companies operating in the digital currency sector are attracting a flood of money. In recent (traditional) stock market flotation, investors valued Coinbase, the cryptocurrency exchange that launched 10 years ago at $ 72 bn, equaled it with BNP Paribas, which had roots stretching back to 1848. Along there was a French bank.
Young people are investment leaders. In Britain, millennials and Gen Z investors are more likely to buy cryptocurrencies than equities, and more than half (51 percent) of those surveyed traded digital currencies, research from broker Charles Schwab shows.