BUSINESS & ECONOMY Major businesses and even governments are adopting alternative applications of the cryptocurrency technology. Since the end of last year, people have been left dumbfounded by the meteoric rise in the value of bitcoin, the father of all cryptocurrencies.
The digital currency started off in 2017 with a value of around $800, but, by the end of the year, was probably the highest-performing investment anyone could have ever made, as it reached dizzying heights of $19,783 in December. Such gains are enough to make the most well-heeled Wall Street sharks giddy with glee.
However, on the flipside, there has been a lot of concern recently that cryptocurrencies might be a bubble that could burst any day, crumbling the fortunes of many would-be investors and sending the markets reeling. On January 17, bitcoin’s value suddenly halved as futures contracts on the cryptocurrency expired, sending shockwaves through the cryptocurrency market that buffeted even top performing “alt-coins” like ethereum and ripple.
While bitcoin’s central role in the crypto market is undeniable, it is arguably in its own speculative bubble within the larger market, which contains more stable alt-coins. If bitcoin’s bubble was to burst, it would inevitably stagger the $700bn market, as it occupies about a third of it.
Also, many exchanges use bitcoin to buy and sell other cryptocurrencies or to convert them back into fiat. But investors are now diversifying their portfolios by buying other, arguably more stable cryptocurrencies that could absorb any blows that may shake the bitcoin pillar. Read more from aljazeera.com…
thumbnail courtesy of aljazeera.com