What Does Bitcoin's Meteoric Rise Mean For Investors?
By: Charles Bovaird
7 Dec. 2017
Bitcoin prices have rallied so far this year, climbing past $16,000 and returning more than 1,300% year-to-date.
These sharp gains have produced many so-called Bitcoin millionaires, as reports have cropped up all over about individuals who have made their fortunes simply by investing in the digital currency.
While Bitcoin has enjoyed a meteoric rise this year, what do these sharp gains mean for investors?
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Going forward, investing in Bitcoin - or simply holding the digital currencies - could provide these investors with more returns.
However, it could also be a trap, causing these market participants to suffer sharp losses.
While some analysts are bullish about what the digital currency's future outlook, others are far more cautious, warning that Bitcoin has entered a bubble and could soon suffer either a correction or an outright crash.
Certain analysts, like Latium CEO and co-founder David Johnson, are very optimistic.
"I would say without question we will see Bitcoin above 20k before the end of the year," he said. "Momentum is growing daily and as momentum grows sellers have less reason to sell."
Pawel Kuskowski, CEO & co-founder of Coinfirm, a blockchain and regulatory technology firm, also provided a bullish outlook.
"Although there are going to be dips or what the industry calls corrections, the market and I mean the mass or traditional market is beginning to see the legitimacy of bitcoin," a development that fuels growing adoption, he stated.
As more people use Bitcoin, this rising demand will fuel higher prices, emphasized Kuskowski.
However, not everyone is optimistic about the digital currency's short-term outlook.
'The Biggest Bubble Of Our Lifetime'
"I think this is going to be the biggest bubble of our lifetime," said Oliver Isaacs, a tech entrepreneur and investor. "Valuations and prices are going to get out of control."
He is certainly not the only one who has voiced such concerns, as cryptocurrency fund manager Jacob Eliosoff has asserted that Bitcoin has entered a bubble, and that at this point, a market crash is inevitable.
Analyst Tariq Alwahedi has provided similar warnings, recently stating that "I believe that a correction is imminent."
Alwahedi, CEO of CryptoBnB, a cryptocurrency-based platform for renting, added:
"The fundamentals are still very strong for BTC, but at the speed it's growing I feel the increase in price of BTC is driven by hype and speculation more than fundamentals."
'An Exciting Time For Bitcoin'
Joe Lee, founder of Magnr, offered a more optimistic stance on Bitcoin's recent price gains.
"I don't think we are in a bubble," he said, stating that while he expects the digital currency to experience of roughly 10% within the next two weeks, any such pullbacks represent buying opportunities.
"There is huge demand at the moment that does not seem to be fading away," said Lee. Finally, he stated that:
"It's an exciting time for bitcoin."