So far in 2017, the currency has experienced an appreciation of 1,700%, after obtained gains equivalent to 120% in 2016. The question of the winners and those who have not invested yet, how much more can it raise?
Joe Kennedy and Bernard Baruch were two well-known billionaires in the first half of the 20th century who had something in common. In the case of Joe Kennedy, one morning in the late 1929s he was a young man who cleaned shoes suggested several ideas for buying shares. In the case of Baruch, it was a taxi driver who suggested several actions to buy with the safety of a Wall Street person. Both understood that this euphoria had reached the most common person, it was a symptom of a bubble about to explode.
The success of these investors was to have sold a time to receive account of this "irrational exuberance" which was as Robert Shiller, Nobel Prize in Economics 2013, catalog of years before the financial crisis of 2008 on the behavior of the housing bubble USA that was the protagonist of this crisis.
The recent fame of bitcoin and the other cryptocurrencies seems to be in the same moments, although it has its reason for being. I was impressed that currently in the world, in the conversation table, and at sea from a rural country in China or Latin America, to the big financial executives or the most powerful men in the world, they talk about cryptocurrencies and betting on their appreciation.
It has probably not been any other recognized financial asset in the world that has obtained the Bitcoin returns this year. So far in 2017, the currency has experienced an appreciation of 1,700%, after having obtained gains equivalent to 120% in 2016. The question of the winners and those who have not been invested, how much more can raise?
The first advice that comes close to investing in stocks, as a particular example, that is, the case of the company in which it invests to have the basics in color, is attractive to buy and sell. This also applies in the case of countries to invest correctly in foreign currency. For that reason, to answer the same question, the question is how Bitcoin and the other cryptocurrency works.
Although Bitcoin has been conceptualized as a currency since it is a monetary medium for financial transactions, its logic is different from a common currency.
The cryptocurrency has no monetary authority, on the contrary, it is backed by a computer network where all purchase and sale transactions are registered in a virtual block, which are assigned through a process classified as 'mining'.
This process is responsible for controlling, neutralizing and managing Bitcoin transactions in the virtual block to guarantee the competitiveness and security of the transaction system. In short, it is the replacement of a central bank by a stock exchange and a clearing house for a single currency.
As you can see, understanding the cryptocurrency market and its operating mechanism is quite difficult to understand, rather than the basic sense of supply and demand of another. This without considering the regulatory challenges for complexity to identify market participants, in addition to the tax implications, or the risk of a means such as money laundering.
What worries me the most is that when investigating with several experts of the financial markets in New York, Shanghai, London and other epicenters of the financial world, I have not found the first person I can have in more detail about how cryptocurrencies work and understanding most appropriate way to value them in order to know if current prices are still cheap, or on the contrary understand that we are close to the outbreak of the bubble.
Therefore, even if the reader supposes that the conclusion of this reading is to suggest a resounding "No", the one in the cryptocurrencies, my position is different. On the contrary, the opportunity to invest in cryptocurrencies can offer an interesting point of view, nobody really knows.
It is not clear that it should be treated as if it were a bubble, where it is reversed with a definite exit plan, either with profit or loss, and sin reaches the last stage. I hope that you as an investor and reader have the ability that Kennedy and Baruch had to enjoy the party until the moments of "irrational exuberance".
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