Friday, December 9, 2022

Investment Heavyweights Talk of a Crypto Bubble, but Is Anyone Listening?

Investment Heavyweights Talk of a Crypto Bubble, but Is Anyone Listening?

As the Bitcoin price surges, falls and bounces in 2017, several investment heavy-hitters are weighing in with predictions. This past week, strategists from Goldman Sachs and Charles Schwab added their analyses. Are bitcoin, cryptocurrencies and other digital tokens a massive, dangerous bubble, a once-in-a-lifetime opportunity… or both? 

Also read: Hundreds Show Up to Guam Convention to Learn How to Invest in Bitcoin

It’s a Bubble Say Goldman Sachs, Charles Schwab, Marc Cuban

Bitcoin core black logoAccording to a Business Insider report, Goldman’s head of technical strategy Sheba Jafari predicted BTC would continued its correction in the near future. The price could drop as much as 25 percent from here, Jafari wrote to Goldman clients. However the longer term looked more optimistic — there’s potential to head to $3,212 USD or $3,915, though “it just might take time to get there”.

Jeffrey Kleintop, chief global investment strategist at Charles Schwab, said bitcoin is a bubble and wondered how entrenched it could become in the economy before it bursts.

At the start of June, tech billionaire Marc Cuban also noted the speed and ease at which Bitcoiners were making money signals a bubble.

Is This Advice Useful to Average Investors?

Despite their status in the technology and financial worlds, the prognosticators offer little useful advice for the average punter. Anyone, from a skilled technical analyst to a guy in a bar, will tell you that Bitcoin or Ethereum could be worth thousands of dollars… or fall to almost nothing.

It’s also hard to deny all cryptocurrencies represent various faces of the same investment craze. The ability to accurately predict how large a bubble will get and when it will burst is always more valuable than the ability to identify its existence.

Ethereum and Unproven ICOs Make Bitcoin Returns Look Tame

This time, eyes are not only on Bitcoin but other cryptocurrencies as well — most of which don’t even have Bitcoin’s eight-year lifespan.

Ethereum’s ether went from $8 to $384 between January and June, though it’s currently around $282. Even seasoned Bitcoiners have blanched at those kinds of fluctuations and issued their own bubble warnings.

EthereumRecent initial coin offerings (ICOs) for tokens that exist only in Ethereum contracts have broken records after record. This is despite their parent projects having zero track record or proof the tokens will have any value after the initial sales.

Last week, raised an all-time high $185 million for its EOS token that buyers (according to the terms and conditions) may not even get to own.

Bancor, which promises to create yet more tokens all centered around a contract-based reserve currency, raised $153 million. That was right after Brave’s ICO raised $36 million in 30 seconds, and almost crashed the Ethereum network.

The ICO craze, even now, shows no signs of slowing down.

Whether it ends in laughter, tears — or both — no-one really knows. That includes those who say they do. Plenty will be ready to say “told you so” whichever direction prices take.

Does a bubble make more or less likely to invest? Let’s hear your thoughts.

Images via Pixabay, Ethereum

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