COMMENT | “The price of bitcoin just went up by over 40 percent in three days! I am jumping on it right now. Do you want to join me?”
This is a conversation between an elderly woman and a young man that I overheard in a train while I was on my way back from an initial coin offering (ICO) event in London. I approached the woman, and asked if I could join her conversation.
She was excited and talked to me about how she could have multiplied her money had she invested in bitcoin when it was less than US$0.01 back in 2009 (it was valued at US$8,300 when we were having this conversation).
However, to my surprise, she could not answer a few of my basic questions: What is bitcoin? Why is the price skyrocketing? What is your fundamental reason for speculating that the price will increase further?
She did not seem keen on continuing the conversation with me. Luckily, I had arrived back in Birmingham, and I shook hands with her before getting off the train.
Little did she know that I am a sceptic of the current cryptocurrency environment. The more I understand its technical bits and observe the false hype by attending related events, the more I fear a crash that could wipe out the entire market, which is valued at over US$620 billion.
I will not deny that cryptocurrency could impact humankind tremendously in the next few years. However, it is vital for us to understand its fundamentals before turning our hard-earned cash into virtual currencies...