Cryptocurrencies, Investments

End of the Cryptocurrencies Bubble?

March 16, 2018

End of the Cryptocurrencies Bubble?

The fact that none of us can really predict the future with 100% certainty is why it makes the world so interesting and equally frustrating for some people. It is especially so, when it comes to predicting where markets will head, the art and science of it is both alluring and elusive to many.

Cryptocurrencies are no exemptions.

After my previous post, I received almost equal feedbacks from those agreeing to my views with those questioning my utter lack of knowledge in cryptos. While there are many who shared my view on the bubbly and frothy crypto markets and the need for regulation and caution, there are many who continue to challenge my views and understanding of the arcane mechanics of the crypto world.

Thou art no expert in blockchain nor crypto,  keep thy comments to thyself.

Bitcoin as a proxy to Cryptos as it is today

As we speak, the Bitcoin is trading treacherously at multiple months low. Some reports and analyst are warning of the deathcross and impending gloom and doom of cryptocurrencies.

Frankly, the current market behaviour is not unexpected. Neither is it one of all gloom and doom. The valuation of Bitcoin and other cryptocurrencies had risen too much and too fast in a short period of time, it is only rational and within expectations that it will retrace, correct and come off. 

The point is, one should focus more about the amazing technology behind the cryptocurrencies and not the mere market valuation of the coins or ethers to assess its value and importance to society and economies.

My suspicion is that these cryptos had been abused by ill-intentioned people for sinister purposes, be it for money laundering, tax evasion, outright speculation and other less than ethical activities. Others have opined similar suspicions.

Given the limited supply and under-developed market infrastructure, it is not unlikely that professional players and market spin-masters had seized the opportunity to create a perfect storm for the unwary and unknowing.

Do not shun from Cryptos, there is good in it.

Let this be a good lesson to all, be it retail investors or regulators. One should exercise due diligence and prudence. For retail investors, always remember the golden rule that if it is too good to be true, it might be really so. And for the regulators, one should not always stay by the sidelines and allow bloodshed on the masses before acting.

Nonetheless, we all should learn from our experience and strive to improve. Especially so in this era where technological advances are happening so rapidly and so pervasive that one needs to adapt fast and yet remain wise. One should not be fearful of the cryptos, but one needs to learn how to embrace it, control it and use it wisely.

Change can be painful, but it is necessary for us to adapt and survive. Cryptos are not for speculation, it is meant to fill gaps that fiat had inherently and inevitably created.

Allow me to quote the late Prof. Hawkings,

“Intelligence is the ability to adapt to change.”

about author

Seng Ti is currently heading a Treasury & Finance team in a MNC and is serving as the President of the Association of Corporate Treasury (Singapore) aka ACTS. He enjoys reading and discussing about current affairs, politics, life, wine and lives a normal life with his wife and 2 young kids.