The Bitcoin Phenomenon; Is It A Myth That We Are All Buying The Digital Currency?

The Bitcoin Phenomenon; Is It A Myth That We Are All Buying The Digital Currency?

This content is sourced and brought to you by The Money Cloud – comparing the best rates for sending money overseas offered by hand-picked, regulated brokers and money transfer agencies.

Most of us have heard of it, but are we buying it? After a rocky first few years, when it was seen as little more than a vehicle for the ill-gotten gains of drug dealers, money launderers and terrorists, bitcoin, the concept, successfully overcame the doubters in 2017, leading to a stunning hike in the price of the digital currency, from less than $1,000 dollars in January, to above $19,500 by the end of December.

Those who believed in bitcoin, and saw the logic of the original white paper, released by the mythical “Satoshi Nakamoto”, who may or not be a real person, and could be a developers collective, in October 2008, are certainly smiling now.

But what about the rest of us? Considering that some of the world’s richest men; Warren Buffett, the “Sage of Omaha”, elite hedge fund manager Ray Dalio, and Jamie Dimon, the head of JP Morgan bank, called this one wrong, referring to bitcoin as a “bubble”, a “fraud”, and worse, what chance does the hairdresser or the plumber have of riding the bitcoin wave successfully.

Investing in digital currencies; for besides bitcoin, there are literally thousands of other “alt” coins, from genuine contenders like Ethereum, Ripple, Dash, and Litecoin, to surprise hits like Doge Coin, which started out as a joke, and there is even a “Theresa May Coin”; can be a white knuckle, roller-coaster ride.

You only have to look at their performance to date in 2018; prices have dropped dramatically; to figure that out. But that hasn’t stopped everybody talking about how they may, or may not have been stockpiling “crypto” assets.

Warren Buffet once famously said that “it’s only when the tide goes out that you find out who has been swimming naked”; so just how many people really are reinventing themselves as crypto-traders?

This week, Survey Monkey provided some clues. In a survey conducted jointly with the Global Blockchain Business Council, 5,700 respondents in the US were quizzed about the popularity, and use of cryptocurrencies. Here is what they said.

6 out of every 10 questioned, on average, had heard of bitcoin. Not bad for a country in which less than half of the population own a passport, it is rumoured.

According to the survey, bitcoin is regarded as trustworthy by more Americans, 24%, than their own government, 17%. Only 5% of people said that they owned bitcoin, but 21% indicated that they were considering “adding it to their portfolios”.

The tech gender bias is also evident; 71% of bitcoin owners are males, the survey reveals, and 58% fall between the ages of 18 and 34 years old. Almost half are ethnic minorities.

Why do people invest? 2 reasons, chiefly. The chance to make a good-to-great return, and a lack of trust in the existing financial system.

It seems that, despite January’s decline in price, to a little over $11,000, people are keeping the faith. More than two thirds of respondents believe that in 5 years’ time, bitcoin will be worth significantly more than it is now.

That said, 38% still felt that bitcoin is a bubble that is about to burst. What do you think?

“Nice try”, we hear you say. Guess we’ll have to wait until the tide goes out.