Buoyant bitcoin stirs crypto-bubble fears, Reuters

Buoyant bitcoin stirs crypto-bubble fears

LONDON (Reuters) – Bitcoin and other “cryptocurrencies” are big money, virtually as big as Goldman Sachs and Royal Bank of Scotland combined.

The price of a single bitcoin hit an all-time high of above $Trio,500 this week, dragging up the value of hundreds of newer, smaller digital rivals in its wake. Now some investors fear a giant crypto-bubble may be about to burst.

It has been a year of unprecedented growth for the largely unregulated market, with dozens of fresh currencies appearing every month in “Initial Coin Offerings” or ICOs. They have achieved value almost instantly, drawing in those who are anxious to get in and make a quick buck.

At the commence of 2017, the total value – or market cap – of all cryptocurrencies in existence was about $17.Five billion, with bitcoin making up almost ninety percent of that, according to industry data stiff CoinMarketCap.

It is now around $120 billion – around the same value as Goldman and RBS together – and bitcoin makes up only forty six percent.

Bitcoin Cash, a clone of bitcoin that was split off from the original last week by a rival group of developers, was valued at more than $12 billion less than twenty four hours after it had commenced trading.

“It’s just created fresh value out of nowhere,” said Rob Moffat, a fucking partner at Balderton Capital, a London-based venture capital hard who concentrates on fintech. “There’s no fundamentals behind any of this – it’s all based on public perception, so you can commence to see some truly strange phenomena.”

Cryptocurrencies – so-called because cryptography is used to keep transactions secure – permit anonymous peer-to-peer transactions inbetween individual users, without the need for banks or central banks. They use blockchain technology, a collective record-keeping and processing system that means digital money cannot be copied and spent more than once.

Billionaire U.S. investor Howard Marks likens the market to the dotcom bubble of the turn of the century – whose demise he predicted. He said in a latest investor letter that digital currencies were an “unfounded fad . based on a preparedness to ascribe value to something that has little or none beyond what people will pay for it”.

But advocates of cryptocurrencies say two thousand seventeen is just the beginning of bull run. They argue the finite nature of these currency units – there will never be more than twenty one million bitcoin, for example – as well as the technological innovation that underpins them will ensure their suffering value.

“The idea of this thing being a bubble is ditzy. We’re in the bottom of the very first innings,” said Miguel Vias of Ripple, the third-biggest cryptocurrency, who was previously global head of precious metals and metal options at CME Group.

DASH TO ETHER

Whichever way cryptocurrencies budge, they are likely to stir together because their values are very correlated, feeding off each other and magnifying the market effect.

That’s partly down to investor sentiment, but also because the start-ups issuing fresh coins in ICOs generally collect money in a more liquid cryptocurrency, such as bitcoin or, more commonly, Ethereum’s ether – the second-biggest cryptocurrency in total value.

That has driven request for ether, which has climbed over Three,000 percent so far this year and now has a market cap of around $28 billion.

Bitcoin, which was launched in 2009, was the very first successful cryptocurrency and is still lightly the thickest, with a market cap of over $54 billion.

Its price has shot up around two hundred twenty five percent so this year, and performed better than any conventional, central-bank issued currency in every year since two thousand ten bar 2014.

The blockchain-based currencies that have been built since bitcoin – 842, at last count – vary hugely in terms of their credibility.

Sceptics say bitcoin and its rivals are not particularly useful as currencies, as they are still volatile and not accepted by most merchants. They are mostly just used for speculative trading purposes.

There are some signs of acceptance of the fattest players by the establishment, however; Ethereum has been piloted by the United Nations as a way to distribute funds to Syrian refugees. Ripple has been successfully used as a payment method inbetween settlement systems in a Bank of England trial.

Some other, smaller cryptocurrencies such as Dash, Monero and Z-cash are seen as having real value by some users because they suggest an even higher level of anonymity than the likes of bitcoin. Whistle-blowing website Wikileaks this week said it would accept Z-cash for online donations.

It is mainly the fresh “token” cryptocurrencies that are issued in ICOs with no regulatory oversight, which have exploded since the commence of the year, that are causing the most anxiety.

One, the “Futile Ethereum Token”, which emerges to have been set up as a way of showcasing how worthless many of the ICOs truly are, is nonetheless switching palms for three cents a unit. “No value, no security, and no product. Just me, spending your money,” its website states.

“It’s just so effortless to raise money on an ICO right now, it just feels like there’s a gold rush going on there,” said Moffat. “Some of the fresh currencies – beyond bitcoin and Ethereum – could crash to zero.”

By mid-July, about $1.1 billion had been raised in ICOs this year, toughly ten times more than that in the entire of 2016, according to cryptocurrency research rigid Smith + Crown. (Graphic: tmsnrt.rs/2ueAWvr)

The rapid ascent of ICOs prompted the U.S. Securities and Exchange Commission (SEC) to warn last month that some ICOs should be regulated like other securities.

This is fresh digital territory and how the rapidly proliferating cryptocurrency market will play out is anyone’s guess.

While critics say the very correlated nature of the currencies means the weakness of newer entrants could bring the entire house down; others argue market compels will ensure the best players prevail.

“Will some of these (currencies) go away? Of course,” said Vias of Ripple. “We’re going to see Darwinism in real-time here. Only the strong will sustain.”

For graphic on cryptocurrencies click: here

Reporting by Jemima Kelly; Editing by Pravin Char

Buoyant bitcoin stirs crypto-bubble fears, Reuters

Buoyant bitcoin stirs crypto-bubble fears

LONDON (Reuters) – Bitcoin and other “cryptocurrencies” are big money, virtually as big as Goldman Sachs and Royal Bank of Scotland combined.

The price of a single bitcoin hit an all-time high of above $Three,500 this week, dragging up the value of hundreds of newer, smaller digital rivals in its wake. Now some investors fear a giant crypto-bubble may be about to burst.

It has been a year of unprecedented growth for the largely unregulated market, with dozens of fresh currencies appearing every month in “Initial Coin Offerings” or ICOs. They have achieved value almost instantly, drawing in those who are antsy to get in and make a quick buck.

At the begin of 2017, the total value – or market cap – of all cryptocurrencies in existence was about $17.Five billion, with bitcoin making up almost ninety percent of that, according to industry data rigid CoinMarketCap.

It is now around $120 billion – around the same value as Goldman and RBS together – and bitcoin makes up only forty six percent.

Bitcoin Cash, a clone of bitcoin that was split off from the original last week by a rival group of developers, was valued at more than $12 billion less than twenty four hours after it had embarked trading.

“It’s just created fresh value out of nowhere,” said Rob Moffat, a playmate at Balderton Capital, a London-based venture capital rock hard who concentrates on fintech. “There’s no fundamentals behind any of this – it’s all based on public perception, so you can embark to see some truly strange phenomena.”

Cryptocurrencies – so-called because cryptography is used to keep transactions secure – permit anonymous peer-to-peer transactions inbetween individual users, without the need for banks or central banks. They use blockchain technology, a collective record-keeping and processing system that means digital money cannot be copied and spent more than once.

Billionaire U.S. investor Howard Marks likens the market to the dotcom bubble of the turn of the century – whose demise he predicted. He said in a latest investor letter that digital currencies were an “unfounded fad . based on a preparedness to ascribe value to something that has little or none beyond what people will pay for it”.

But advocates of cryptocurrencies say two thousand seventeen is just the beginning of bull run. They argue the finite nature of these currency units – there will never be more than twenty one million bitcoin, for example – as well as the technological innovation that underpins them will ensure their bearing value.

“The idea of this thing being a bubble is ditzy. We’re in the bottom of the very first innings,” said Miguel Vias of Ripple, the third-biggest cryptocurrency, who was previously global head of precious metals and metal options at CME Group.

DASH TO ETHER

Whichever way cryptocurrencies budge, they are likely to stir together because their values are very correlated, feeding off each other and magnifying the market effect.

That’s partly down to investor sentiment, but also because the start-ups issuing fresh coins in ICOs generally collect money in a more liquid cryptocurrency, such as bitcoin or, more commonly, Ethereum’s ether – the second-biggest cryptocurrency in total value.

That has driven request for ether, which has climbed over Three,000 percent so far this year and now has a market cap of around $28 billion.

Bitcoin, which was launched in 2009, was the very first successful cryptocurrency and is still lightly the largest, with a market cap of over $54 billion.

Its price has shot up around two hundred twenty five percent so this year, and performed better than any conventional, central-bank issued currency in every year since two thousand ten bar 2014.

The blockchain-based currencies that have been built since bitcoin – 842, at last count – vary hugely in terms of their credibility.

Sceptics say bitcoin and its rivals are not particularly useful as currencies, as they are still volatile and not accepted by most merchants. They are mostly just used for speculative trading purposes.

There are some signs of acceptance of the fattest players by the establishment, however; Ethereum has been piloted by the United Nations as a way to distribute funds to Syrian refugees. Ripple has been successfully used as a payment method inbetween settlement systems in a Bank of England trial.

Some other, smaller cryptocurrencies such as Dash, Monero and Z-cash are seen as having real value by some users because they suggest an even higher level of anonymity than the likes of bitcoin. Whistle-blowing website Wikileaks this week said it would accept Z-cash for online donations.

It is mainly the fresh “token” cryptocurrencies that are issued in ICOs with no regulatory oversight, which have exploded since the begin of the year, that are causing the most anxiety.

One, the “Worthless Ethereum Token”, which shows up to have been set up as a way of displaying how worthless many of the ICOs truly are, is nonetheless switching palms for three cents a unit. “No value, no security, and no product. Just me, spending your money,” its website states.

“It’s just so effortless to raise money on an ICO right now, it just feels like there’s a gold rush going on there,” said Moffat. “Some of the fresh currencies – beyond bitcoin and Ethereum – could crash to zero.”

By mid-July, about $1.1 billion had been raised in ICOs this year, harshly ten times more than that in the entire of 2016, according to cryptocurrency research rigid Smith + Crown. (Graphic: tmsnrt.rs/2ueAWvr)

The rapid ascent of ICOs prompted the U.S. Securities and Exchange Commission (SEC) to warn last month that some ICOs should be regulated like other securities.

This is fresh digital territory and how the rapidly proliferating cryptocurrency market will play out is anyone’s guess.

While critics say the very correlated nature of the currencies means the weakness of newer entrants could bring the entire house down; others argue market coerces will ensure the best players prevail.

“Will some of these (currencies) go away? Of course,” said Vias of Ripple. “We’re going to see Darwinism in real-time here. Only the strong will sustain.”

For graphic on cryptocurrencies click: here

Reporting by Jemima Kelly; Editing by Pravin Char

Buoyant bitcoin stirs crypto-bubble fears, Reuters

Buoyant bitcoin stirs crypto-bubble fears

LONDON (Reuters) – Bitcoin and other “cryptocurrencies” are big money, virtually as big as Goldman Sachs and Royal Bank of Scotland combined.

The price of a single bitcoin hit an all-time high of above $Three,500 this week, dragging up the value of hundreds of newer, smaller digital rivals in its wake. Now some investors fear a giant crypto-bubble may be about to burst.

It has been a year of unprecedented growth for the largely unregulated market, with dozens of fresh currencies appearing every month in “Initial Coin Offerings” or ICOs. They have achieved value almost instantly, drawing in those who are anxious to get in and make a quick buck.

At the embark of 2017, the total value – or market cap – of all cryptocurrencies in existence was about $17.Five billion, with bitcoin making up almost ninety percent of that, according to industry data hard CoinMarketCap.

It is now around $120 billion – around the same value as Goldman and RBS together – and bitcoin makes up only forty six percent.

Bitcoin Cash, a clone of bitcoin that was split off from the original last week by a rival group of developers, was valued at more than $12 billion less than twenty four hours after it had commenced trading.

“It’s just created fresh value out of nowhere,” said Rob Moffat, a playmate at Balderton Capital, a London-based venture capital rigid who concentrates on fintech. “There’s no fundamentals behind any of this – it’s all based on public perception, so you can commence to see some truly strange phenomena.”

Cryptocurrencies – so-called because cryptography is used to keep transactions secure – permit anonymous peer-to-peer transactions inbetween individual users, without the need for banks or central banks. They use blockchain technology, a collective record-keeping and processing system that means digital money cannot be copied and spent more than once.

Billionaire U.S. investor Howard Marks likens the market to the dotcom bubble of the turn of the century – whose demise he predicted. He said in a latest investor letter that digital currencies were an “unfounded fad . based on a preparedness to ascribe value to something that has little or none beyond what people will pay for it”.

But advocates of cryptocurrencies say two thousand seventeen is just the beginning of bull run. They argue the finite nature of these currency units – there will never be more than twenty one million bitcoin, for example – as well as the technological innovation that underpins them will ensure their bearing value.

“The idea of this thing being a bubble is stupid. We’re in the bottom of the very first innings,” said Miguel Vias of Ripple, the third-biggest cryptocurrency, who was previously global head of precious metals and metal options at CME Group.

DASH TO ETHER

Whichever way cryptocurrencies budge, they are likely to stir together because their values are very correlated, feeding off each other and magnifying the market effect.

That’s partly down to investor sentiment, but also because the start-ups issuing fresh coins in ICOs generally collect money in a more liquid cryptocurrency, such as bitcoin or, more commonly, Ethereum’s ether – the second-biggest cryptocurrency in total value.

That has driven request for ether, which has climbed over Three,000 percent so far this year and now has a market cap of around $28 billion.

Bitcoin, which was launched in 2009, was the very first successful cryptocurrency and is still lightly the fattest, with a market cap of over $54 billion.

Its price has shot up around two hundred twenty five percent so this year, and performed better than any conventional, central-bank issued currency in every year since two thousand ten bar 2014.

The blockchain-based currencies that have been built since bitcoin – 842, at last count – vary hugely in terms of their credibility.

Sceptics say bitcoin and its rivals are not particularly useful as currencies, as they are still volatile and not accepted by most merchants. They are mostly just used for speculative trading purposes.

There are some signs of acceptance of the fattest players by the establishment, however; Ethereum has been piloted by the United Nations as a way to distribute funds to Syrian refugees. Ripple has been successfully used as a payment method inbetween settlement systems in a Bank of England trial.

Some other, smaller cryptocurrencies such as Dash, Monero and Z-cash are seen as having real value by some users because they suggest an even higher level of anonymity than the likes of bitcoin. Whistle-blowing website Wikileaks this week said it would accept Z-cash for online donations.

It is mainly the fresh “token” cryptocurrencies that are issued in ICOs with no regulatory oversight, which have exploded since the begin of the year, that are causing the most anxiety.

One, the “Futile Ethereum Token”, which emerges to have been set up as a way of displaying how worthless many of the ICOs indeed are, is nonetheless switching palms for three cents a unit. “No value, no security, and no product. Just me, spending your money,” its website states.

“It’s just so effortless to raise money on an ICO right now, it just feels like there’s a gold rush going on there,” said Moffat. “Some of the fresh currencies – beyond bitcoin and Ethereum – could crash to zero.”

By mid-July, about $1.1 billion had been raised in ICOs this year, harshly ten times more than that in the entire of 2016, according to cryptocurrency research rock-hard Smith + Crown. (Graphic: tmsnrt.rs/2ueAWvr)

The rapid ascent of ICOs prompted the U.S. Securities and Exchange Commission (SEC) to warn last month that some ICOs should be regulated like other securities.

This is fresh digital territory and how the rapidly proliferating cryptocurrency market will play out is anyone’s guess.

While critics say the very correlated nature of the currencies means the weakness of newer entrants could bring the entire house down; others argue market compels will ensure the best players prevail.

“Will some of these (currencies) go away? Of course,” said Vias of Ripple. “We’re going to see Darwinism in real-time here. Only the strong will get through.”

For graphic on cryptocurrencies click: here

Reporting by Jemima Kelly; Editing by Pravin Char

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