The world’s social media platforms and financial markets are lighting up about cryptocurrencies and “initial coin offerings” (ICOs).  Are you getting caught up in the buzz?

There are tales of fortunes and dreamed realized.

But this time its different. As the crypto revolution investors and the generally easily seduced can’t get enough of virtual currencies. Loads out there to make you feel like the FX expert.  All neatly named too to rival bitcoin; Ethereum, ripple, Litecoin are some of several alternative cryptocurrencies that have cropped up and there is loads more to chose from.

Most experts (what ever they are..because lets face it no one really has a clue whats going on) are having a wild old ride.

Theres no way can’t end well. There is no way that bitcoin, litecoin and other cryptocurrencies craze are simply vehicle for siphoning cash into a bubble destined to burst in spectacular fashion. Tech stocks in 2000 and housing prices just before of 2008 are typically cited.  But if you are technically inclined you can add a truck load of other minor ‘also rans’ recessions like The App phase.  remember all this App instant millionaires?  The 3d printing revolution, remember the 3d printer in every home? and on an on….

The problem with bitcoin and litecoin is that they are so volatile and not only.  Quite possibly the murkier aspect of who is controlling the prices is more or less clouded in questions mark.  And these markets are local, national and international and include an ever-broadening range of products and participants.

Paper currencies don’t tend to move and shake as much simply because its owners are a tad more stable.

Governments tend to be generally more interested din stability than wild currency rides. Even gold for that matter doesn’t move around too much. So its nigh on impossible for cryptos to be used as a substitute for cash until the prices settle down.

In the meantime who do you listen to.  Who are the experts?  And can they offer any insight into why and how Bitcoin prices keep going up and up.

In the absence of any offers why not list to the SEC chairman Jay Clayton who sounded an alarm bell on bitcoin, this week saying “there is substantially less investor protection” than with stocks and bonds and “correspondingly greater opportunities for fraud and manipulation.”

Good read and welcome voice if reason from the hyperbole and drooling you will find in the mainstream media. Worth the ten minutes of study and reading before you swap the family silverware for a bundle of magic Bitcoins.

So before you jump on board ask a few questions the very same you would ask with any product …to list just a few:

  • Is the product legal?  Is it subject to regulation, including rules designed to protect investors?  Does the product comply with those rules?
  • Is the offering legal?  Are those offering the product licensed to do so?
  • Are the trading markets fair?  Can prices on those markets be manipulated?  Can I sell when I want to?
  • Are there substantial risks of theft or loss, including from hacking?

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