![]() I think it’s really more of a speculative activity.” I would be, at this point, pretty skeptical of bitcoin. Still, bitcoin’s rapid ascent in value has prompted warnings from prominent investors including one Bank of England deputy governor, who said investors should “do their homework” before investing in the currency.įederal Reserve Bank of New York president William Dudley added during an event Wednesday in New Jersey that bitcoin “is not a stable store of value. spokesperson Shane Quinn said the group’s Montreal Exchange derivatives bourse does not currently offer bitcoin futures, and no specific product launch is in immediate plans.īut she said the TSX operator is watching innovation in the sector closely and if interest continues to grow, and “most importantly, if our clients demand it, MX would consider creating products for the Canadian market down the road.” Several large market exchanges including Nasdaq, CBOE Holdings and CME Group - the world’s largest derivatives exchange - are planning to provide futures contracts based on bitcoin, while media reports suggest investment banking giant Goldman Sachs is exploring a new trading operation dedicated to crypto currencies.Įxchanges like CME, however, might require brokers to post extra collateral to trade bitcoin futures given the volatility. On Thursday, the Bank of Canada released a research paper considering the merits of the central bank establishing a digital currency, which could emerge as a cheaper alternative to debit or credit cards, according to The Canadian Press.Īgainst this backdrop, new crypto-hedge funds are entering the market, and retail investors have been piling in. Vergne, who is also an associate professor at the Ivey Business School at London’s Western University, cited regulatory moves in some countries, including Japan, toward granting legitimacy to crypto currencies, which potentially increases the future size of the crypto market. He said investors may see an opportunity for fast and lucrative returns since many initial coin offerings allow payments to be made in bitcoin and in units of smaller rival ethereum, which artificially inflates demand for these two crypto currencies, thereby driving their price up even more relative to other cryptos. software, protocol, network infrastructure), the more valuable cryptos become.” “The more developers volunteer time and effort to improve the underlying technology (e.g. “People often compare bitcoin to a commodity, a security, or a currency, but the inescapable reality is that bitcoin (and other cryptos) is technology,” he said. Still, some see plenty of room for upside.Ī key reason is technology potential, said, Jean-Philippe Vergne, co-director of the Scotiabank Digital Banking Lab. He also said that potential threats, including technical issues or new, restrictive regulations could trigger a collapse in value over time. Traders are betting on the creation of a powerful new asset class that is as yet largely unregulated, he said in an interview, adding that “price frenzy can accelerate adoption.” And while retail investors who can trade bitcoins through new venture capital funds risk getting burned, Hileman said increasing awareness could have a hockey-stick effect, driving up usage and acceptance after a period of flat growth. Hileman said evidence suggests that few investors are buying bitcoin as a means of exchange, with research from Cambridge showing only 100,000 merchants and vendors accepted bitcoin as payment as of 2015.Įven so, new users have skyrocketed from the 2.9 million to 5.8 million at the start of the year in tandem with the currency’s own ascent. (As of Friday midday, one bitcoin, which can be exchanged for products, services and other currencies, was valued at $13,480.20 (Cdn.)) He said bitcoin’s near 1,100 per cent year-to-date increase through Wednesday to top a record $11,000 (U.S.) before dropping by $2,000 over a matter of hours Thursday on profit-taking and trading outages is more about “pure mania” than bitcoin’s value as a real-world currency. “It’s exciting and scary at the same time,” said Garrick Hileman, a research fellow at the University of Cambridge’s Judge Business School who is best known for his research on monetary systems innovation. The astronomical rise and fall of bitcoin has stoked fears about the risky, hyper-volatile and highly speculative nature of crypto currency investment, but experts say it also suggests bitcoin is gaining mainstream traction, at least as an asset class. ![]()
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