The increasing value of bitcoin has led to some investment and finance advisors claiming that the digital currency is about to crash.
The cryptocurrency has been enjoying a continued upward trajectory over the past few weeks. As a result, it is trading at record high prices. Yesterday, bitcoin was recorded at $7,617, according to CoinMarketCap, pushing its market value up to just under $127 billion. Since then prices have fallen slightly; however, it still remains in the $7,000 region at $7,122.
One of the factors boosting the currency’s price is due to CME announcing earlier this month that it will be launching a bitcoin futures by the end of 2017.
Yet, with no sign of the currency slowing down anytime soon, several financial and investment advisors are stating that the market is not sustainable and that it will crash, reports The Express.
Scott Kelly, CEO of Black Dog Venture Partners, believes that the large number of people trading in bitcoin could bring about its downfall.
A month before the 1987 crash, my cab driver said he started day trading. A month before the real estate crash in 2007 in Arizona, my cab driver said he was getting into flipping real estate. Last week, my Uber driver said he just started trading Bitcoin.
Jason R. Escamilla, CEO of ImpactAdvisor, agrees and is of the opinion that the price of bitcoin has reached ‘unsustainable’ levels.
Furthermore, according to billionaire investor Mark Cuban, bitcoin can’t scale to the level of Visa and Mastercard, considering it a store of value rather than a currency. Cuban’s previous stance regarding the digital currency was that it was in a bubble. However, over the past few years, he has begun to understand the value and structure of the currency. This is evident by the fact that he is investing in bitcoin through an exchange-traded fund (ETN) in Nordic Nasdaq, a Swedish stock exchange.
Despite his investment in the cryptocurrency, though, he doesn’t believe that it can operate as a currency due to its limited capacity compared to Visa and Mastercard. Whereas bitcoin can only process six transactions per second, Visa and Mastercard can process thousands.
Regardless of this, however, the digital currency has risen from being around $0.08 in 2010 to now being valued over $7,600. It may take a long time before it can claim the ability to process thousands of transactions, but despite the odds it is making an impact in many people’s lives, countless of which rely on the cryptocurrency to survive.