The sharp rise and fall of cryptocurrencies in 2017 and 2018 was another cautionary tale of exuberance. It mimicked the dot-com bubble in 2000. Other notable bubbles include the tulip mania in the 1600s, when tulip prices in the Netherlands skyrocketed before subsequently crashing. Tulip mania is generally regarded to be the first speculative bubble.
Many cryptocurrencies went bust. But Bitcoin remains a key focal point in the cryptocurrency space.
Bitcoin vaulted into the public eye in 2017, eventually topping around the 19,000 level in December 2017. Rising investor demand to trade cryptos, specifically Bitcoin, caused the Chicago Mercantile Exchange (CME) and the CBOE to begin listing Bitcoin futures.
As fast as Bitcoin’s rise, its subsequent fall was just as rapid. In December 2018, Bitcoin bottomed around the 3,200 price level, over 80% off the peak in one year. Since then, the coin has rallied off those lows, but remains well away from those lofty highs.
In early May, Bitcoin reached the 6,000 price level for the first time since November.
There were two sharply contrasting positions on the future of cryptocurrencies at the 2019 Las Vegas SALT Conference, which features panels with major figures in business, politics and other fields.
The segment featured founder and CEO of Galaxy Digital, a firm that describes itself as “the bridge between the crypto and institutional worlds,” Michael Novogratz; and Ethereum co-founder Joseph Lubin. Economist Nouriel Roubini, meanwhile, was a skeptic, critical of the utility of cryptocurrencies.
Institutions Slowly Embracing Cryptocurrencies
Novogratz said the institutional-investment herd is “slowly on the move,” with Facebook (FB) potentially announcing a major play into the space. Last week, the Wall Street Journal reported the social media giant is seeking to launch a cryptocurrency-based payments system. This move is one example of institutions investing and participating in this potential growth area.
Lubin highlighted the advances in the blockchain ecosystem. “Cryptocurrencies are very interesting, but they’re not really the breakthrough.” Instead, the breakthrough is the ability to build systems on a new trust foundation, i.e. blockchain.
Roubini considers cryptocurrencies to be scams. He said “studies suggested 81% of all the cryptocurrencies … were scams.”
Despite the nuclear winter in Bitcoin prices, investor interest remains high — and growing.
In early May, payment processor Square (SQ) revealed strong growth in Bitcoin sales via its Cash app. The company reported $65.5 million in Bitcoin revenue in its first quarter.
Read more at: https://www.investors.com/news/cryptocurrencies-some-institutions-embrace-controversy-remains/
