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Here's What Everyone's Saying as Bitcoin Surges Near $10,000
Bitcoin’s meteoric surge hit a record high past $9,000 over the weekend and crept near the $10,000 milestone on Monday, which has investors very excited, very scared, very skeptical – or a combination of all three.
As bitcoin breaks records and the enthusiasm among its investors shows no signs of slowing down, the world’s biggest cryptocurrency is generating all the buzz inside and outside of Wall Street. Let’s take a look at what everyone is saying about bitcoin’s nearly 900% rise in 2017.
Investors have come down with a bad case of FOMO
Among millennials – especially those who spend anytime on social media – FOMO (aka ‘Fear of Missing Out’) is a cousin of peer pressure that causes them to do something because everyone else is doing it: From going to a party to binge watching a Netflix show to buying concert tickets and going to Coachella, etc. It now appears that investors have also been infected with FOMO as it pertains to getting in on this bitcoin run.
Per the Wall Street Journal:
“Bitcoin has seen another frenzy of buying as the fear-of-missing-out trade bites even harder,” Chris Weston, chief market strategist at IG Group, wrote to clients on Monday, while adding separately that “mad momentum” is driving the price higher.
He noted that Coinbase, the largest bitcoin exchange in the U.S., added about 100,000 accounts last week from Wednesday to Friday. That brings its total to about 13.1 million, underscoring the surge in activity among retail participants.
The Journal adds that Charles Schwab had 10.6 million active brokerage accounts as of October by comparison, although Schwab’s client assets totaled $3.3 trillion, much higher than those in Coinbase accounts.
Like it or not, Wall Street banks better take notice
Bitcoin’s surge has been met with skepticism or outright disdain in some corners of Wall Street, but whether they like it or not, banks are going to have to pay attention as client interest in crytocurrency grows.
Bitcoin’s surge in value is forcing Wall Street banks to balance clients’ interest in speculating on the cryptocurrency with executives’ skepticism about its future. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has been one of bitcoin’s most prominent detractors, calling it a fraud and deriding buyers as “stupid,” while his finance chief, Marianne Lake, has struck a more measured tone. The firm is “open minded” to the potential uses for digital currencies so long as they are properly regulated, she said last month.
Speaking of Jamie Dimon, UAE sovereign fund chief says he’s wrong to call bitcoin a fraud
Whereas Bridgewater Associate’s Ray Dalio called bitcoin “a bubble” – an opinion shared by others – the JPMorgan chief leveled the harshest criticism of the cryptocurrency when he called it “a fraud.” However, Khaldoon Al Mubarak, head of Abu Dhabi’s Mubadala Investment Company – one of the largest sovereign funds in the world – says he doesn’t agree with Dimon’s assessment of bitcoin, even though he admits to CNBC that he’s “still on the fence” when it comes to bitcoin and blockchain technology.
Asked whether he agreed with Dimon’s view, Al Mubarak said: “No. I wouldn’t agree in calling it a fraud. I would say time will tell. It could well be (a fraud) and it could as well not be. I think one has to be open-minded.”
Although the state-backed wealth fund’s boss did not yet have a “clear view” on blockchain — the technology that underpins cryptocurrencies like bitcoin — he said that his biggest concern was around regulation.
“I think blockchain, its growth, from the single digits, early double-digits, to astronomical growth, will really depend on how fast you can execute and where you’re going to be able to execute under a regulatory environment that is acceptable,” he said.
It may or may not be a bubble, but speculators are certainly driving bitcoin’s explosive growth
The meteoric surge by bitcoin to $10,000 will no doubt continue to drive skeptics who see it as a runaway bubble that is barreling toward a crash. But for those who are on the bitcoin bandwagon, the surge may obscure something else: The general public still remains pretty-much on the sidelines when it comes to the cryptocurrency.
However, adoption of cryptocurrency by the public at large (or for that matter, by retailers and other firms) has been limited, meaning that most of the growth in bitcoin’s value has been driven by speculation and investors looking to get rich quick. The crypto markets in general are littered with shady companies and scams, and bitcoin has a tendency to implode in value every now and then due to occurrences like the crash of trading exchange Mt. Gox, so it’s possible something could quickly knock the value back down a peg.
Photo: Getty iStock