Could bit coin be just another bubble


The past few months have seen a truly phenomenal explosion onto the world stage of so called crypto currencies the major player in this industry being bit coins and a host of other alto currencies. Whereas bit coin is still in its infancy having been only started in 2009 it is clear that those rushing to embrace this new alternative financial order are fed up with the existing system that many believe is constantly being manipulated by an elite few who seek to control and dominate the world. A good example to show this is the way banks profit from loans which are nothing more than numbers on computer screens that can be adjusted at will, we have had cases of banks claiming statements of financial position that were totally exaggerated until the bitter truth started taking down banks during the financial crisis that swept much of America and Europe in 2011.

A few years ago it would have been impossible to think that bit coin and a host of other crypto currencies would be embraced with such enthusiasm at the time, even launching the crypto currency itself was a gamble. While this is all good and provides welcome relief with all its advantages one would be forgiven for thinking this is not one of those previous bubbles that will eventually burst. History has numerous examples of new inventions that everyone thought would transform the world only to turn out as bubbles.

Before the industrial revolution life was generally slow transportation was mainly by horse carts, with the advent of the industrial revolution for example in the 1920’s virtually all people were amazed by the ability for machines to do enormous tasks on a previously unseen scale, all of a sudden incomes exploded more workers were absorbed into factories and life become better for all there was a general feeling that this had to be it, that prosperity was here to stay forever while the industrial revolution was trans formative in many respects it was not necessarily the magic bullet it was meant to be.


Fast forward several years later we had the dotcom bubble thousands of dollars were made by a new breed of online entrepreneurs who were armed with the enormous opportunities the world wide web provided those who jumped into the fray early on made their dollars later on as the masses became aware of the dotcom revolution it became harder and harder to make the quick buck eventually silicon valley threw up.

The real estate bubble was another classic example everyone who was someone made their gains in the real estate craze until problems started showing up, prices of houses were grossly inflated and yet the true value of houses on the ground was a different story.Drawing parallels to today’s crypto currency wave we should be cautious and take lessons from history.

A majority of the participants in the crypto currency trade are speculators who are in to make a buck or two through arbitrage, a lot of the prices are highly volatile and are not backed up by solid guarantees like the fiat currencies, proponents of bit coin and other crypto currencies may argue that they are free of manipulation and inflationary tendencies If we stop to think a little what if the value of bit coin is being artificially pushed up by some brilliant con artists just waiting for the right moment to cash out what would happen to all the thousands of the little guys out there. In the last month alone the price of bit coin fell after one of the major sites mtgox that helped users cash out their crypto currencies went out of business there will always be uncertainties surrounding new things.


The big investors out there certainly do monitor trends and look at every business opportunity that presents itself; it is quite possible that the price of bit coin is being deliberately pushed up by financial sharks, if you could double or even triple your money I doubt if you would be the only one looking at the same opportunity

My suggestion is if you have already made significant sums of money with bit coin it is best to recognize your gains and take steps to diversify your investments because you never know when the price will take a nose dive, one thing is certain the price of bit coin will not continue rising forever. There will come a time when other factors come into play and as Governments hate the anonymous nature that crypto currencies currently provide to their users as this anonymity can be used to do a lot of negative things like evading tax, purchasing restricted drugs from pharmacies online etc as Governments around the world start to gain deeper insights into this currency it is quiet likely that regulation of this sector will result in changes to how we all use crypto currencies.

E-currency | cryptocurrency | Bitcoin

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