Bitcoin or Cryptocurrency has been the recent most lucrative financial instruments that had led to abnormal profits for individuals who bought these virtual currencies at the start of 2015. The currency’s worth has augmented over 900% on weighted average.
The unpredictability still exists amongst the investors about the fickle nature of virtual currency. Though the prices of these currencies have shot up to $10,000, the risk aversion factor still hinders the yearning of potential investors to invest into something tangible like it. There are still questions regarding the default aftermaths of this currency and the legal framework that can be implemented to safeguard the interests of investors.
While we have the Silicon Valley divided over the legitimacy and safety regarding the virtual currency, we also have proponents of the Bitcoin who have made extreme gains in the subsequent years through value appreciation or capital gains. Jamie Dimon did not hesitate and blatantly questioned the legitimacy of these virtual currencies terming them as “fraud”.
The financial institutions are skeptical about the currency because the entire system and structure of the market is unclear and based on speculations that are creating a bubble in the form of augmented prices, but the consequences of this attempt at inflating the prices will be disastrous if there are no accountability and transparency measures applied to the industry standards.
The involvement of major Wall Street firms in the currency is a positive sign that this medium of exchange might have a future beyond the world of speculations and rumors that increase or decrease the price of this entity. Recently, Chicago Mercantile Exchange announced that it would start offering Bitcoins on its platform. People have started to believe that virtual currency is here to stay for long and might even revolutionize the future of financial markets and instruments. While some people regret not buying the Bitcoins in its initial years of development, the sellers continue to make humungous profits.
The market capitalization index of more than 1300 cryptocurrencies as tracked by Cryptocurrency Market Capitalizations (CMC) has grown from $17.5 billion to over $316.9 billion which is astonishing and shows the diversion of people’s interest from conventional stock and bond markets towards the virtual currency industry.
Investors should now book these virtual currencies being offered all across the globe to ensure good returns in the future.