Bitcoin’s surge fuels fears of asset bubble

[KeyGenKing]

Sky-high valuations for bitcoin have helped the value of crypto currencies burst through $50bn, raising fears of an asset bubble in the unregulated market.




   A growing number of alternative digital currencies — or “alt-coins” — is feeding the speculative frenzy with values in some rocketing as much as 500 per cent in the past week. A sharp spike in the price of bitcoin, which has risen 55 per cent this month and is worth more than gold, pushed it past $1,900 on the Bitfinex exchange on Friday.

The speculation has benefited anonymous payment systems, which are being used by cyber criminals executing widescale attacks such as the “ransomware” hack that spread across the world on Friday.

Aside from bitcoin, there are more than 830 alt-coins ranging from Litecoin, a challenger to bitcoin, to MiketheMug, a coin that promises to make weekly payouts to holders.

An increase in initial coin offerings (ICOs) — unregulated issuances of crypto coins where investors can raise money in bitcoin or other crypto currencies — is fuelling the market and drawing attention from lawyers and financial professionals.

Many fear ICOs, which are trying to market themselves as an alternative to venture capitalists as a way of raising cash for businesses, breach existing securities law.

“An ICO issues crypto tokens rather than stocks and bonds, but that’s irrelevant to the substance of the activity, which is raising capital from the general public,” said Ajit Tripathi, a director in fintech at PwC. “Capital raising activities need to be regulated to protect investors . . . The question is how sophisticated are these investors?”

Regulators, who in many cases are still catching up with how to deal with bitcoin, are only just becoming aware of this spin-off sector.

Japan moved to tighten regulation of bitcoin trading and dealing only last month. The move forced bitcoin exchanges to register with the state and to comply with know-your-customer and anti-money-laundering regulations, adding costs to their business.

Observers say many individuals are trading alt-coins from corporate IT departments, concentrated in the financial sector and falling under the radar of senior executives. Many are sitting on virtual fortunes, but are unable to liquidate their cash as banks clamp down on measures to avoid money laundering.

“Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world,” said Brian Lord, former deputy director for intelligence and cyber operations at GCHQ, the UK’s electronic surveillance agency .
Now head of cyber practice at security group PGI, he added that it was likely very few companies had governance in place regarding crypto currency being traded on their systems.

ICOs, or “token sales”, are also starting to attract venture capitalists such as billionaire and early bitcoin supporter Tim Draper, who announced plans to invest in the highly anticipated launch of Tezos this month. The token is expected to garner big support from the sector’s many unregulated exchanges, many of whom have the capacity to make or break a new coin.

“We are just looking at whether they are going to be popular, they are selling you a dream. The dream is either going to happen or not and that’s why they are exciting for people,” said Arthur Hayes, a trader at Bitmex, a crypto derivatives exchange. “That tension is great for an exchange.”

Other traders were more cautious about the market’s potential. “Is it sustainable? Absolutely not,” said one trader at a dealing venue. “But while it’s happening, it’s happening. The biggest risk is that the SEC steps in.”
Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

[qiwoman2]

Well I am not particularly worried about the SEC, the only thing the SEC can do is stop U.S citizens from entering these markets. Most other countries are happy to allow this unregulated frenzy to go on. I am more worried about a third world war then the SEC right at this minute, with that Lunatic Kim Jong Un and others trying to create havoc lol.

[KeyGenKing]

Well I am not particularly worried about the SEC, the only thing the SEC can do is stop U.S citizens from entering these markets. Most other countries are happy to allow this unregulated frenzy to go on. I am more worried about a third world war then the SEC right at this minute, with that Lunatic Kim Jong Un and others trying to create havoc lol.

Yes, you are right about that!
What if Kim fire's it up? What if Kim Nukes US? or any other Country?
I think Bitcoin price will go up as reaction to it.

[szpalata]

Well I am not particularly worried about the SEC, the only thing the SEC can do is stop U.S citizens from entering these markets. Most other countries are happy to allow this unregulated frenzy to go on. I am more worried about a third world war then the SEC right at this minute, with that Lunatic Kim Jong Un and others trying to create havoc lol.

Yes, you are right about that!
What if Kim fire's it up? What if Kim Nukes US? or any other Country?
I think Bitcoin price will go up as reaction to it.

Stop portraying that dictator as someone powerful. He can't dictates what happens to Bitcoin to us so we won't allow a Third World War.

[Qartada]

It's always interesting to see the mainstream press showing ignorance about niches that you're a part of.  Makes you wonder if the things you've read about other niches are wrong as well.

I mean, when they claim that a rise in price is fuelling an increase in crime even though the thieves nearly always take a ransom denominated in fiat, that's when you know the mainstream press is completely ignorant.

[Xester]

Sky-high valuations for bitcoin have helped the value of crypto currencies burst through $50bn, raising fears of an asset bubble in the unregulated market.




   A growing number of alternative digital currencies — or “alt-coins” — is feeding the speculative frenzy with values in some rocketing as much as 500 per cent in the past week. A sharp spike in the price of bitcoin, which has risen 55 per cent this month and is worth more than gold, pushed it past $1,900 on the Bitfinex exchange on Friday.

The speculation has benefited anonymous payment systems, which are being used by cyber criminals executing widescale attacks such as the “ransomware” hack that spread across the world on Friday.

Aside from bitcoin, there are more than 830 alt-coins ranging from Litecoin, a challenger to bitcoin, to MiketheMug, a coin that promises to make weekly payouts to holders.

An increase in initial coin offerings (ICOs) — unregulated issuances of crypto coins where investors can raise money in bitcoin or other crypto currencies — is fuelling the market and drawing attention from lawyers and financial professionals.

Many fear ICOs, which are trying to market themselves as an alternative to venture capitalists as a way of raising cash for businesses, breach existing securities law.

“An ICO issues crypto tokens rather than stocks and bonds, but that’s irrelevant to the substance of the activity, which is raising capital from the general public,” said Ajit Tripathi, a director in fintech at PwC. “Capital raising activities need to be regulated to protect investors . . . The question is how sophisticated are these investors?”

Regulators, who in many cases are still catching up with how to deal with bitcoin, are only just becoming aware of this spin-off sector.

Japan moved to tighten regulation of bitcoin trading and dealing only last month. The move forced bitcoin exchanges to register with the state and to comply with know-your-customer and anti-money-laundering regulations, adding costs to their business.

Observers say many individuals are trading alt-coins from corporate IT departments, concentrated in the financial sector and falling under the radar of senior executives. Many are sitting on virtual fortunes, but are unable to liquidate their cash as banks clamp down on measures to avoid money laundering.

“Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world,” said Brian Lord, former deputy director for intelligence and cyber operations at GCHQ, the UK’s electronic surveillance agency .
Now head of cyber practice at security group PGI, he added that it was likely very few companies had governance in place regarding crypto currency being traded on their systems.

ICOs, or “token sales”, are also starting to attract venture capitalists such as billionaire and early bitcoin supporter Tim Draper, who announced plans to invest in the highly anticipated launch of Tezos this month. The token is expected to garner big support from the sector’s many unregulated exchanges, many of whom have the capacity to make or break a new coin.

“We are just looking at whether they are going to be popular, they are selling you a dream. The dream is either going to happen or not and that’s why they are exciting for people,” said Arthur Hayes, a trader at Bitmex, a crypto derivatives exchange. “That tension is great for an exchange.”

Other traders were more cautious about the market’s potential. “Is it sustainable? Absolutely not,” said one trader at a dealing venue. “But while it’s happening, it’s happening. The biggest risk is that the SEC steps in.”
Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

Many are worried about the potential bubble that was once occurred last 2013. But if you study the increase in bitcoins value at this time you will notice on the charts that there are no signs of bubble. The reason for the increase in bitcoins value was the adoption of Japan of bitcoin that caused an intense increase in the number of bitcoin users that contributed to the increase demands on the market causing an increase in value.

[Juggy777]

Well I am not particularly worried about the SEC, the only thing the SEC can do is stop U.S citizens from entering these markets. Most other countries are happy to allow this unregulated frenzy to go on. I am more worried about a third world war then the SEC right at this minute, with that Lunatic Kim Jong Un and others trying to create havoc lol.

Yes, you are right about that!
What if Kim fire's it up? What if Kim Nukes US? or any other Country?
I think Bitcoin price will go up as reaction to it.

SEC does not controls Bitcoins or let's point out to the fact last time SEC turned down the Bitcoin ETF there was a slight correction in the price but post that is history. The problem with Bitcoins is the centralized world is running scared, the demands for its adoption are growing and this kind of paid articles are proof of it. As far Kim and USA are concerned I had this doubt before, but now I am convinced nothing is going to happen. They are like those kids, who say touch me and I will beat you, and as soon you touch them they sit quietly. Trump needs a diversion from his affairs and it's a political stunt, so nothing will happen on this front. Th the prices are high, but do a bubble burst looks unlikely.

[Leonard2016]

there are a lot of questionable texts in OP!

but generally speaking everything started with Japan becoming super friendly towards bitcoin and when the adoption of bitcoin happen in a massive scale as a legal way of payment.

that caused the rise in bitcoin. also the internal fight that outside world doesn't know much about caused the altcoins to start their fake rises (the 500% to 4000% pumps) and now everything is bloated.

we can only hope that altcoin market horrible crash in the near future doesn't reach the media. because that can kill the altcoin market for at least 9 months.

[Kprawn]

The House of cards for Alt coins will come down hard, and that is just inevitable ..... You should be aware of that and start selling before that

happens, because that is just how it works. I jump in and out of Alt coins just to profit from this mess... but I will always be primarily invested

into Bitcoin. One thing about a bubble is.... It only last for a little while. 

[Karpeles]

Please post the source of the article, or people might think you are a copying bot or something(also I think I've seen it in the press section)

https://www.ft.com/content/ce3ef54e-371b-11e7-bce4-9023f8c0fd2e

Just more FUD caused by media's lack of information. Even the regularization of BTC in Japan was put in a negative perspective. Better ignore them and do your own judgement, or visit only specialized and trusted sites.

It's always interesting to see the mainstream press showing ignorance about niches that you're a part of.  Makes you wonder if the things you've read about other niches are wrong as well.

When the media is not telling lies because the are the pets of the global elite, they are because of their incompetence, they somehow think they understand things that they don't and are sloppy about their sources of information, so they spread false and inaccurate information.

There is 0 reason why the big media should be trusted in any way

[HabBear]

Initial Coin Offerings are super risky. Hell, most initial public offerings of stock do poorly, and those have a ton of due diligence and represent  ownership of something tangible. Most of the alt coins that exist out there should be considered ghost coins...just a momentary glimpse of something we long for (i.e., getting in early on something that will be wildly valuable in the future).

As for the asset bubble, yeah Bitcoin, Litecoin, Ether are all at that point...they are long over due for a solid, sustained pull back. There needs to be a sell off...unless there isn't and it just continues to climb another $1,000 before pulling back a bit. That's why timing investing is so tricky. It's better to buy regularly and hold for a long time...in investing it's called "dollar cost-averaging". In this world we could call it bitcoin cost-averaging.

Buy, hold, and when bitcoin pulls back buy some more. And if you get to a point where the amount of money you have in bitcoin (or it's price on any given day) is stressing you out and making it difficult for you to sleep you need to sell off some or all. Don't be into this thing to the point of stress...that's rule #1.

[iluvpie60]

While a bubble is never good, we cant know for sure we are in a bubble. Best thing to do if i are worrried. Self half your coins amd put other half in fiat. If prices goes up you make money holding coins. If price crashes u buy more coins after it has leveled out with ur fiat.

[ixus]

Sky-high valuations for bitcoin have helped the value of crypto currencies burst through $50bn, raising fears of an asset bubble in the unregulated market.

Observers say many individuals are trading alt-coins from corporate IT departments, concentrated in the financial sector and falling under the radar of senior executives. Many are sitting on virtual fortunes, but are unable to liquidate their cash as banks clamp down on measures to avoid money laundering.

“Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world,” said Brian Lord, former deputy director for intelligence and cyber operations at GCHQ, the UK’s electronic surveillance agency .
Now head of cyber practice at security group PGI, he added that it was likely very few companies had governance in place regarding crypto currency being

Who are these guys from IT departments and how many coins they own I wonder ?