Bitcoin boom and bust a lot like the dot-com bubble \u2014 but on steroids, Morgan Stanley says<\/a><\/li>\n<\/ul>\nThe cryptocurrency is the most-high profile of hundreds of digital coins built on the innovative blockchain technology, and became a retail investor phenomenon as prices surged last year, exploding to US$19,000 in December. But the currency has lost around 65 per cent of its value since then, trading below US$7,000 this month, after suffering one of its biggest quarterly losses in the first three months of the year.<\/p>\n
Barclays’ report predicts the ceiling of cryptocurrencies to be between US$600 and US$780 billion, equivalent to the peak sum of market capitalization in January this year.<\/p>\n
“Our estimation of long-term value focuses on the monetary and store of value needs of low-trust sectors of the global economy: weak, underdeveloped states and global criminal enterprise,” the bank said.<\/p>\n
Others say the cryptocurrency and its rivals remain a maturing market, although they are still looking for a clear reason for existence.<\/p>\n
\u201cThe original idea was a means of payment, and that\u2019s pretty much gone,\u201d said Thorsten Koeppl, associate professor in the economics department at Queen\u2019s University.<\/p>\n
Another key Bitcoin attraction was its extremely low transaction fees, but the opposite is occurring right now \u2014 transaction fees are very high.<\/p>\n
Investors, burnt by the currency\u2019s volatility, are more cautious amid the crash, says Cole Diamond, CEO of Coinsquare.<\/p>\n
\u201cPeople are now doing their research on what they\u2019re buying especially compared to late 2017,\u201d Diamond said.<\/p>\n
Toronto-based Coinsquare is a trading platform for Bitcoin, apart from other cryptocurrencies Litecoin and Ethereum, and plans to add Ripple to its roster very soon, even as prices of all the currencies plummet.<\/p>\n
The market was in \u201cabsolute euphoria\u201d in December and the number of people who are in the market is greater than it has ever been, Diamond said.<\/p>\n
\u201cIf you look at the price of Bitcoin even though it\u2019s down in 2018, if you look back a year it\u2019s up 600 per cent,\u201d he said, noting that Coinsquare itself is more than 100 times bigger than it was a year ago.<\/p>\n
But regulatory scrutiny has come to Canadian crypto exchanges, with Ontario security regulators launching a probe into the market, according to a Globe and Mail report last week.<\/p>\n
Diamond says Coinsquare welcomes regulations as a lack of guidelines pose a public risk, but declined to comment on how the scrutiny impacts his platform.<\/p>\n
\u201cIt should be up to this sort of regulator to go as quickly as possible to figure out how they can be sure protocols are in place to protect those that they\u2019re responsible for protecting,\u201d Diamond said.<\/p>\n
Even as regulators come down hard on the nascent industry, advertising bans on social media has also contributed to the downfall, says Diamond.<\/p>\n
Alphabet Inc., Facebook Inc. and Twitter Inc. have all started restricting advertising of cryptocurrencies, while a number of Asian governments have spoken out about the dangers of trading cryptocurrencies and are seeking to implement greater regulatory oversight, as it remains a currency of choice for shady dealers.<\/p>\n
\u201cA recent study by the University of Sydney and University of Technology Sydney found that \u2018approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions (approximately $72bn per year) are associated with illegal activity,\u201d Barclays said in their report.<\/p>\n
In a rare bit of good news, however, U.K. and France recently stated they will create framework for cryptos.<\/p>\n
\u201cFrance has every interest in becoming the first major financial centre to propose an ad-hoc legislative framework for companies making an Initial Coin Offering,\u201d French finance minister Bruno Le Maire wrote in an op-ed on a website last week.<\/p>\n
Pliniussen says buyers and markets are becoming more comfortable with the regulation and adjusting to the greater scrutiny.<\/p>\n
\u201cThere\u2019s this learning curve that naturally comes with a new asset class like this and that\u2019s what we\u2019re seeing,\u201d he said.<\/p>\n
While Bitcoin’s future remains uncertain, Koeppl says the fact that this technology has been created is symbolically very important.<\/p>\n
\u201cThe concept of having a blockchain where you do not have to have intermediates is quite transformational and goes beyond cryptocurrencies,\u201d he said.<\/p>\n
jbarrera@postmedia.com<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The currency continues to suffer from a mix of regulatory and application issues that is eroding investor, and user, confidence<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4804"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=4804"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4804\/revisions"}],"predecessor-version":[{"id":4805,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4804\/revisions\/4805"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=4804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=4804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=4804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}