Five days ago bitcoin passed the British pound and became the 6th most circulated currency in the world. It’s difficult to comprehend the scale of this crypto revolution. Particularly the incredible speed that digital assets are growing.
South Korean policy makers are now worried about this growing mania. It’s why the country’s top financial watch dog, said it had grave concerns about speculative buying. But why has bitcoin had such an effect in South Korea?
They had until December and they didn’t disappoint. The ASX Ltd was in need of replacing their CHESS system, the system that records holdings, executes trades and settles them. It was world leading technology in the 1990s. But in 2017, not so much.
The little known crypto that trades as (Miota) is up 152% since announcing the deal with Microsoft last week. The graph has quite literally gone vertical as the coin has surged 873% this month. One month ago, it had a market cap of US$1 billion. Now it is just shy of US$8 billion.
To trade successfully you just need to realise a simple truth. Something that describes simply and eloquently what is happening beneath the surface of your chosen market. Trading sounds hard to a lot of people. Here’s the truth though. Markets are actually not hard to understand.
Like the dot com boom, all sorts of innovative cryptocurrencies have sprung up, or are about to. Those that smugly declare cryptocurrencies will end up in a new dot com crash miss the point. But there are certainly lessons you can glean from the dot com era.
The bitcoin market is quickly surpassing some of the richest people and most valuable companies in the world. Bitcoin’s market is now worth more than US$192 billion. So what’s next for bitcoin?
Right now talk of bitcoin is everywhere. I can appreciate some may find it tiring. The reason the conversation has merit however, has nothing to do with the surging price. At least, it shouldn’t. The price is merely a consequence of the bitcoin architecture.
Calls for an inquiry into misconduct in the banking industry have been coming for some time. If public confidence in the banks is shaken, that could be more damaging than the real potential for misconduct to be brought to light and punished. So, is this the end of the banks’ dominance in Australia? Are our favourite dividend-paying stocks in trouble?
Black Swan moments are essentially extreme outlier events that have enormous and unforeseen consequences. A financial bubble is a Black Swan moment. So does this mean that bitcoin is a bubble?