Monday, December 04, 2017

Of Bitcoins and Dutch Tulips

December 1, 2017 Boston and Beijing—The digital currency called bitcoin has made speculators a fortune, drawn in drug dealers, technology optimists, and those who distrust traditional banks.

Now, it’s ever-more mainstream. From small investors in Japan to big institutional ones in the West, bitcoin is attracting new waves of people anxious to pour money into the latest craze.

It’s hard to resist the action. Worth 6 cents seven years ago, a bitcoin now sells for more than $10,000 – a mind-blowing rise of more than 16 million percent. This year alone, it’s value jumped from $998 to a record $11,155 on Wednesday morning. Seven hours later it had dropped 17 percent, then rose above the $10,000 mark, only to drop another 15 percent on Thursday. By Friday, it was up around $10,500.

“I talk to a lot of people and they say: ‘I have bitcoin’ – average households, many colleagues, friends,” says Daniel Heller, a fellow at the Peterson Institute for International Economics and former official at the Bank for International Settlements and the International Monetary Fund. “It’s definitely very big.”

It also looks like a financial bubble, he and other financial experts say.

Read the rest here.

My take: Could someone show me a Bitcoin? Can I lock one in a safe deposit box at the bank? This sounds like the greatest racket since someone decided to market pet rocks. Of course when you paid for a pet rock, you actually got... a rock.

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