By Crystal Kim
What the heck is a bitcoin? For those who haven’t been following the saga of the cryptocurrency, bitcoin is Internet currency that was created in 2009. There are several marketplaces also called “bitcoin exchanges” that allow people to buy or sell bitcoin using different currency. Why would you want Internet money?
It allows for anonymous buying. Since bitcoin is stored on computers or in the cloud, users can spend and hoard bitcoin anonymously. One man accidentally threw away a hard drive containing $9 million worth. Though, some have bought bitcoin hoping it’ll gain in value over time.
Photographer: Chris Ratcliffe/Bloomberg
Photographer: Chris Ratcliffe/Bloomberg
That’s very possible given the Securities Exchange Commission could approve the Winklevoss twins’ bitcoin ETF (COIN). Analysts say that an accessible vehicle such as an ETF that tracks the value of bitcoin could cause a surge in the nascent market, according to the WSJ.
Yves Lamoureux, president and chief behavioral strategist of a macroeconomic research firm of the same name, says bitcoin is on a path that could turn into bubble territory. Lamoureux even suggests that it could get to $25,000 as gold bugs see its appeal. He wrote:
Many of the key ingredients present in past bubbles are now present to create the next one in bitcoin. What makes this possible is the mathematics of finite supply…This is why we are convinced that digital money or cryptocurrencies will eventually find its appeal with hard asset investors — or a rare chance to get in on a venture capital style bet.
Things are already getting a bit hairy. Bloomberg reported that China’s three biggest bitcoin halted exchanges after the People’s Bank of China said in a Wednesday meeting that they will shut down those that violate rules on foreign exchange management, money laundering, and payment and settlement. Asia, of course, houses most of the world’s bitcoin trades, which drove a 160% rally against the dollar in the past 12 mos.
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