They’re seen variously as the way of the future, a scam or something in between. While the world makes up its mind, owners of cryptocurrencies have had a wild ride. Here’s what you need to know if you’re thinking of jumping on board
If the sharemarket is a roller coaster, the world of cryptocurrencies is a tsunami with tremendous sudden peaks and violent snapbacks that wipe out the gains. The volatility of some of the currencies is massive. $US100 invested in Bitcoin at the beginning of 2017 reached $US1469 at the end of last year. Other cryptocurrencies did even better with $US100 in Ripple soaring to $US35,664, Ethereum to $US9495 and Litecoin to $US5360.
“The moves were unbelievable, to be honest,” says Chris Weston, analyst with IG markets, a CFD provider that offers leverage into cryptocurrencies. “People are getting very, very rich, very, very quickly.”
He says the media, particularly social media, play a large role in stirring up people who have a fear of missing out (FOMO).
The past six months has seen retail investors – including those with large mortgages and flat wages – buying into virtual currencies. Until then the coins were typically the realm of the tight-knit, enthusiastic crypto community, sophisticated investors with spare money to risk and hedge funds. Data suggests that around 95% of coin wealth is held by men and 95% of the wealth is held by 4% of the owners.
The tales of great gains have spread and everyone seems to have an intoxicating story of someone who has made incredible profits. It triggered a mania that saw kids putting their pocket money into coins, teenagers trading them, mothers’ groups swapping tips at coffee mornings, people joining online clubs and attending regular meet-ups and conferences. Financial planners received requests from their clients to add cryptocurrencies to self-managed superannuation fund (SMSF) portfolios.
Diese Geschichte stammt aus der March 2018-Ausgabe von Money Magazine Australia.
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Diese Geschichte stammt aus der March 2018-Ausgabe von Money Magazine Australia.
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