Will The Real Bitcoin Please Stand Up
Too Many Cryptocurrencies?
For the past several months I have been positive on Bitcoin. I have liked the fact that it rebounded from the China Crackdown that coincided with the Jamie Dimon – Bitcoin is a Fraud comment. Since then, I have argued that the launch of Bitcoin futures and even more importantly, Bitcoin ETFs, would drive further gains in the price of Bitcoin (and all major cryptocurrencies). Here we are with Bitcoin closing the week at over $7,700 (according to Bloomberg), which is just below its all-time high. The market has reacted well to all the news and it is clear that there are new adopters on a daily basis. Not only will futures and ETFs help attract new interest, but it is clear that many firms have done a good job of making Bitcoin (and other cryptocurrencies) more accessible.
What is starting to concern me is the proliferation of cryptocurrencies.
Within Bitcoin you have the 'forks' that are creating potentially new paths. Then you have not only the existing 'major' cryptocurrencies like Ethereum, but it seems like there are new cryptocurrency launches on a daily basis, ranging from WhopperCoin to stories about Banks attempting to create their own cryptocurrencies.
Right now, the launches and the 'buzz' they are generating seems to have helped propel Bitcoin higher.
Can that continue, or will buyers get nervous that the market is too fragmented, which might limit the commercial value of any particular cryptocurrency, or worse, will the market get concerned that it is too easy to create ICO's and that is a sign of a bubble building?
For now, I think the growing adoption rate will outweigh those concerns,
but for those calling it a bubble – the list of bubble-like behavior is increasing. Right now, the launches and the 'buzz' they are generating seems to have helped propel Bitcoin higher. Can that continue, or will buyers get nervous that the market is too fragmented, which might limit the commercial value of any particular cryptocurrency, or worse, will the market get concerned that it is too easy to create ICO's and that is a sign of a bubble building?
Chuck Reynolds
Marketing Dept
Contributor
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