Skyrocketing bitcoin raises fears of asset bubble
RT.com
15 May, 2017
The surge in the price of bitcoin has some worried that the world’s most popular cryptocurrency is an asset bubble in an unregulated market.
Bitcoin was trading close to $1,900 against the US dollar on the Bitfinex exchange on Friday, pushing the market value of digital currencies to break through the $50 billion mark.
An increasing number of alternative cryptocurrencies, amounting up to 830 “alt-coins,” is boosting the speculative shift with the price of some plummeting 500 percent over the past week.
The speculation among alt-coins has benefited anonymous payment systems employed by cyber criminals performing wide-scale attacks.
At the same time, growth in initial coin offerings (ICOs), which help blockchain startups to sell their tokens directly to the public to get capital without any regulatory oversight, is fueling the market, drawing attention from lawyers and economists.
Some experts are worried ICOs breach existing securities law.
“An ICO issues crypto tokens rather than stocks and bonds, but that’s irrelevant to the substance of the activity, which is raising capital from the general public. Capital raising activities need to be regulated to protect investors. The question is how sophisticated are these investors?” said PricewaterhouseCoopers director Ajit Tripathi, as quoted by the FT.
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