Bitcoin, the world’s most popular cryptocurrency, has soared more than 100% in the last two months. The once-mysterious investment is now being taken very seriously by Wall Street, and many are starting to wonder whether a bitcoin bubble is about to burst.
Last week, bitcoin hit an all-time high, only to suddenly drop nearly 20% over the next two days. Just today, bitcoin moved about 5% higher. For those familiar with the digital currency, these types of swings are no surprise—it is the nature of the cryptocurrency beast (also read: Explaining Bitcoin and Crypto Currency).
But some are more hesitant to write these sharp moves off as minor blimps. Take Bloomberg’s Cory Johnson, for example. Speaking about the recent price action on bitcoin, Johnson warned about the speculative nature of the currency’s valuation.
“While the long term value of bitcoin may be in the eye of the beholder, the volatility is really in the eye of the speculator,” Johnson said.
Johnson also pointed out that, like the finite resource of golf, part of bitcoin’s current appeal is that it is designed to eventually run out. Bitcoin production is supposed to be capped at 21 million, and there are already more 16 million bitcoins in circulation.
However, as more and more people attempt to “mine” new bitcoins, the process becomes more difficult. Bitcoin is not expected to hit its cap until 2140.
Of course, some are far more bullish on bitcoin. In fact, Saxo Bank analyst Kay Van-Petersen, who accurately predicted that bitcoin would hit $2,000 this year, recently said that the cryptocurrency could be worth a staggering $100,000 in ten years.
Investors will almost certainly not find that kind of return anywhere else.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Bitcoin: Is It a Bubble or a Strong Buy?
Bitcoin, the world’s most popular cryptocurrency, has soared more than 100% in the last two months. The once-mysterious investment is now being taken very seriously by Wall Street, and many are starting to wonder whether a bitcoin bubble is about to burst.
Last week, bitcoin hit an all-time high, only to suddenly drop nearly 20% over the next two days. Just today, bitcoin moved about 5% higher. For those familiar with the digital currency, these types of swings are no surprise—it is the nature of the cryptocurrency beast (also read: Explaining Bitcoin and Crypto Currency).
But some are more hesitant to write these sharp moves off as minor blimps. Take Bloomberg’s Cory Johnson, for example. Speaking about the recent price action on bitcoin, Johnson warned about the speculative nature of the currency’s valuation.
“While the long term value of bitcoin may be in the eye of the beholder, the volatility is really in the eye of the speculator,” Johnson said.
Johnson also pointed out that, like the finite resource of golf, part of bitcoin’s current appeal is that it is designed to eventually run out. Bitcoin production is supposed to be capped at 21 million, and there are already more 16 million bitcoins in circulation.
However, as more and more people attempt to “mine” new bitcoins, the process becomes more difficult. Bitcoin is not expected to hit its cap until 2140.
Of course, some are far more bullish on bitcoin. In fact, Saxo Bank analyst Kay Van-Petersen, who accurately predicted that bitcoin would hit $2,000 this year, recently said that the cryptocurrency could be worth a staggering $100,000 in ten years.
Investors will almost certainly not find that kind of return anywhere else.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>