Some people buy bitcoins not because they support this technology, but because it is prestigious to own bitcoins, notes MIT historian William Derringer. If you own bitcoin, you show what kind of person you are and what technology you value, he says.
University of Maryland business professor Brent Goldfarb compares Bitcoin to a work of art.
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If bitcoin is really a bubble, then no one can say when it bursts. All the signs of an extremely overheated market are now being observed – high volatility and excitement, says the professor.
He expects new success stories of people who have made a fortune on cryptocurrency to emerge in the coming months, and this will attract even more newcomers to this market.
Meanwhile, even hairdressers and taxi drivers are buying cryptocurrency, investors say, recalling the well-known make money trading futures rule of the financial market: even if it is advised to buy on the street, it means that the market is overheated and the end is near.
Fans of bitcoin to all the “horror stories” usually answer that the price of bitcoin is justified. This is a new technology, and its value is increasing as the payment network expands, they say. True, in recent years, transactions in the Bitcoin system have become slower and more expensive, and even in the camp of cryptocurrency supporters, there is a split.
Remembering the risks
The start of trading was awaited by everyone who is somehow connected with cryptocurrencies, which are now traded on unregulated exchanges. Each such site has its own quotes.
Datatrek Research analyst Nick Kolas believes Bitcoin can now be called a legitimate asset. St James’s Place chief investment officer Chris Ralph says he doesn’t want to use the word “legal”, but in his opinion, Bitcoin has definitely moved out of the gray zone.
Bitcoin’s entry into the official market through futures will allow large investors to invest in cryptocurrency, digital money fans hope.
Some analysts point out that the launch of futures may, on the contrary, lead to a fall in prices, because this instrument allows you to play for a decrease in the value of the underlying asset or, as traders say, “short” the market.
The FIA notes that the value of cryptocurrencies varies greatly during the trading day, and trading crypto exchange affiliate program on such a volatile asset is fraught with great risks. The association includes major Wall Street banks such as Goldman Sachs and JPMorgan.
In addition, some trading firms point out that the price of futures is calculated based on data from the Gemini exchange, which is owned by the Winklevoss brothers.
What are futures for?
These derivative financial instruments (derivatives) are used mainly to generate speculative profits. However, futures were originally invented as a hedging tool for price risk. For example, the main risk for bitcoin miners is a drop in the price of a cryptocurrency to a level at which its mining becomes unprofitable.