Don't Feel Bad That You Never Invested in Bitcoin
Bitcoin: that mysterious internet fad, sorry, investment opportunity that appeals to people who got really into preaching about Herbalife on Facebook back in 2012, but have now pivoted to becoming millennial financial experts, has suffered one of its biggest drops in value yet.
Meaning it's not the end of the world that you never bothered to buy into the hype.
After almost halving in value in a matter of weeks, a leading team of economists (no, not you, John from Facebook), believe it still has further to fall.
Despite sitting at a more-than-healthy P422,371.26, the value of one Bitcoin has fallen from a peak of P963,515.65 in December, caused by a general worry from regulators about its volatility amid fears that Cryptocurrency could be banned.
Part of the problem, Capital says, is the surge in value was not being driven by any strategy, but more a simple belief that they will continue to rise in value.
Tulip mania, anyone?
"Most people are buying Bitcoin, not because of a belief in its future as a global currency, but because they expect it to rise in value."
"Accordingly, it has all the hallmarks of a classic speculative bubble, which we expect to burst. Triggers for the bubble to burst could be a further crackdown by regulators or a major hacking attempt.
"When it will fully burst is anyone’s guess and prices could yet rise again, before they fall further ahead," they added.
Even if Bitcoin is banned or made obsolete in the future, Capital acknowledges that the blockchain technology behind cryptocurrency will still have a lasting impact.
"Not only could it transform the financial system—by removing the need for banks to act as intermediaries—but it could have applications elsewhere, for example, in maintaining tax and hospital records. A particularly interesting element is smart contracts, which could transform supply chains and trade finance."
This story originally appeared on Esquire.co.uk.
* Minor edits have been made by the Esquiremag.ph editors.