Bitcoin, Ethereum, Litecoin and the Blockchain Technology that Supports them.
It’s a good day for someone who believes in cryptocurrencies. Two of the top traded assets, Ethereum and Litecoin (LTC) spiked to records Tuesday breaking record levels as demand for cryptocurrencies reached a fever pitch while bitcoin, the most popular digital currency, took a breather. LTC has been having a monster run over the past four days, climbing almost 150% from $100 on Friday to over $250 today.
But lets put our chips on the table and ask how safe is it to invest in cryptocurrency. Many have used the term “bubble” while others run for the hills looking for gold, silver and other precious metals to invest in. “The bubble to end all bubbles continues. Cryptocurrencies only have value if accepted as currencies. However, they cannot be used for the most important transaction in an economy, and cryptocurrency supply can only rise and never fall (making them a poor store of value),” global chief economist Paul Donovan wrote in a post Monday.
Trader Art Cashin, the UBS director of floor operations at the New York Stock Exchange, said bitcoin has reached “parabolic” levels, and it has some at the Federal Reserve worried. Bitcoin is a pure gamble, and those interested in the cryptocurrency should just go to Vegas, CNBC’s Jim Cramer warned on Wednesday. Bitcoin’s rapid gains have prompted some market participants to warn of a bubble. “It’s kind of like ‘Monopoly’ money,” Cramer said on “Squawk Box.”
The cryptocurrency market has received unprecedented attention from investors this year. The total market capitalization of all digital assets currently stands at $466 billion, according to Coinmarketcap data.
But Litecoin and Ethereum each have their own reasons for growth. Litecoin, which is a lightweight, faster Bitcoin competitor, might be benefitting from a recently launched marketing campaign, announced last week by Litecoin founder Charlie Lee.
Bitcoin, the world’s largest cryptocurrency, made its debut on a major futures exchange Sunday. Hayter said that bitcoin’s move into a more conventional markets may lead investors to believe Ethereum to be the next big listing on Wall Street.
“Bitcoin could be at $40,000 at the end of 2018. It easily could,” Bridgewater Associates founder Ray Dalio said on CNBC’s “Fast Money” last month. “There’s a big wave of money coming, not just here but all around the world.”
The price of the cryptocurrency surpassed $500 for the first time Monday evening. The Ethereum transaction volume has been increasing at an exponential rate, likely because of the growing popularity of two decentralized applications (dapps); CryptoKitties and EtherDelta. As of current, the Ethereum blockchain network settles approximately 830,000 transactions on a daily basis, more than all of the cryptocurrencies in the market including bitcoin combined.
Blockchain is the technology that underpins cryptocurrencies like ether and bitcoin. Also known as distributed ledger technology, blockchain is a continuously growing log of data that is decentralized, meaning it is not governed by any central authority.
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