A recent article in the Financial Post said that it was possible the bitcoin bubble could burst. The article quoted a man known only as ‘the bitcoin baba’-a bitcoin expert who had made his fortune in the world of bitcoins.
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator.
“You can listen to all the technologists explain why these projects work or don’t work, and then you go onto the trading channels, and people are just talking about the price action, and sometimes there’s just no correlation,” the financial times quoted the bitcoin expert as saying. His real name remains a secret for fear of hackers stealing his virtual assets.
[pullquote align=”normal” cite=”Bitcoin Baba”]“There’s a massive bubble here that’s going to pop in an ugly way. That’s why I’m not an investor in alt-coins and ICOs, and only trade them depending on what the market’s doing.” [/pullquote]He said.
The article also dealt with initial coin offerings (ICOs). “Of the 30 biggest digital tokens sold in ICOs this year, the ones without a working product backing their projects did the best in their first month of trading, data compiled by Bloomberg show.
So what happened to the ICOs with actual products that could be tested? Almost two-thirds of those declined, according to the article.
An Initial Coin Offering is an unregulated means by which funds are raised for a new cryptocurrency venture. Startups use ICOs to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender for other cryptocurrencies, but usually for bitcoin.
The cryptocurrency boom is slowing as U.S. regulators and regulatory authorities across the world crackdown on fraudulent fundraising schemes. Many blockchain projects have come under the scanner. However, bitcoin futures have made their debut on Wall Street, an indicator that that cryptocurrency is slowly moving into the mainstream world of business.
However, not all ICOs offer solutions. According to bitcoin experts, some ICOs exist only to allow users to buy other tokens. Blockchain technology, while it remains revolutionary and shiny new now will soon become obsolete after it reaches its immediate potential, some experts said.
However, enthusiastic investors and people seeking opportunities from the world of cryptocurrency are still pouring in to make money while the sun shines. The technology behind bitcoin, known as the blockchain, garners more popularity and critical acclaim than ever before making it something that companies want to use.
The world of bitcoin is a lot more complicated than it seems. “You listen to technologists explain why these projects work or don’t work, then you go onto the trading channels, and people are talking about the price action and sometimes there’s just no correlation,” one expert said.