Winner Takes All: Cryptocurrency Investors Must ‘Be Prepared to Lose Everything’
SputnikNews.com
14.07.2017
Potential investors in cryptocurrencies should focus on finding a great new concept rather than rushing to buy volatile Bitcoins, Dr. Campbell Harvey told Radio Sputnik.
The market in Bitcoin and other cryptocurrencies has been subject to remarkable growth but also volatility in recent months.
On June 11, the price of Bitcoin peaked at $3,019, an increase of more than 300 percent since the beginning of the year. However, the price has dropped since then and the cryptocurrency was trading at $2,207 on Friday.
The value of the Ethereum cryptocurrency has also decreased by almost half in recent weeks from a high of $392 on June 13 to $211 on Friday, according to Coindesk.com.
According to BlackRock’s global chief investment strategist, cryptocurrency volatility may be a sign of a bubble in the market.
“I look at the charts, and to me that looks pretty scary,” Richard Turnill told a media briefing in New York on Tuesday.
Dr. Campbell Harvey, Professor of Finance at the Fuqua School of Business, Duke University, told Radio Sputnik that the sharp rises in the value of cryptocurrencies this year is a cause for caution.
“Any time you see something go up in value by a factor of 20 over a few months, you need to be very cautious,” Harvey said.
“I think part of it is just the nature of the actual game, that this is a new technology, it is extremely volatile. For instance, if you look at Bitcoin it is six times the volatility of the S&P 500. It is very volatile and it’s very difficult to figure out what the actual value is. If you are speculating in cryptocurrency, you need to be prepared to lose everything,” Harvey said.
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