Money Will Bitcoin Trigger the Next Market Crash?

04:20  08 december  2017
04:20  08 december  2017 Source:   The Motley Fool

Bitcoin blasts past $10,000 mark amid bubble concerns

  Bitcoin blasts past $10,000 mark amid bubble concerns The cryptocurrency's value has risen nine-fold since the beginning of the year. Tuesday's trading price gives bitcoin a market capitalization of $168 billion, greater than the vast majority of S&P 500 companies, including Dow 30 components Boeing, Disney and GE.Since its founding in 2009, bitcoin has made a name for itself by allowing for anonymous transactions. The digital currency is now accepted by more than 100,000 merchants worldwide, including Microsoft, Dish and Subway. The cryptocurrency has experienced a massive run in 2017. On Jan. 1 this year, bitcoin was priced at just under $1,000.

Plunging markets trigger more sell signals, and so on. Thus, bad monetary policy is the root cause and the solution would cause a crash in asset prices, temporarily. Also, the eurozone would fail if euro-rates normalized.

While Bitcoin 's market cap could eclipse that of Apple, that doesn't increase its market transparency. Although the 1987 crash didn't trigger a recession, Henriques says regulators are still Is it a giant, flimsy tent that can be blown down in the next storm or a steel-beamed skyscraper?

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It has been a spectacular ride for Bitcoin investors. The revolutionary digital currency has almost tripled in value over the last three months to be trading at just under US$12,000, giving it a market cap of almost US$199 billion compared to a mere US$12 billion a year ago. While the combined market cap of all cryptocurrencies only comes to US$354 million, or a mere 19th of the market cap of the NASDAQ Composite Index at the peak of the dot.com boom, they pose a very real threat to the stability of financial markets.

Now what?

Bitcoin and other cryptocurrencies exhibit many of the characteristics of being in a massive market bubble. These include manic speculative buying based on claims of the emergence of a new market paradigm, rapid appreciation in value, and a parabolic price curve. As the bubble expands, valuations increase at an even more frantic rate, accelerating at their fastest rate just before the bubble collapses. It does appear, however, that the bubble is far from its peak.

Cryptocurrency scams soar to $1.7M

  Cryptocurrency scams soar to $1.7M TORONTO - Canadians have been swindled out of than $1.7 million via scams involving cryptocurrencies such as bitcoin so far this year — more than double the amount during all of 2016. The Canadian Anti-Fraud Centre says that's more than five times the amount people lost to these types of scams in 2015, which was roughly $284,000. As bitcoin becomes more popular with investors, sending the price above US$17,000 mark last week, criminals appear to be increasingly turning to cryptocurrencies to extort payment from their victims as well.

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It is more likely that Bitcoin would crash along with everything else because of some other problem in the global economy resulting in a global recession. Will China trigger the next global market crash ?

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CME Group Inc

CME

Bitcoin Futures Start With a Bang as 26% Rally Triggers Halts

  Bitcoin Futures Start With a Bang as 26% Rally Triggers Halts Bitcoin has landed on Wall Street with a bang. Futures on the world’s most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on Cboe’s website was so heavy that it caused delays and outages. The website’s problems had no impact on trading systems, Cboe said.

× Some on Wall Street say .2 trillion in student debt could trigger the next market crash . Ackman believes a seizure in this lending market would result in a major hit to the US economy, the same way that the housing market crash did less than 10 years ago.

While Bitcoin ’s market cap could eclipse that of Apple, that doesn’t increase its market Although the 1987 crash didn’t trigger a recession, Henriques says regulators are still befuddled about how to Is it a giant, flimsy tent that can be blown down in the next storm or a steel-beamed skyscraper?

152.07
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Fortis Inc

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36.80
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Amazon.com Inc

AMZN

1,159.79
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S&P/TSX Composite

0000

16,015.68
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You see, Wall Street and other major financial institutions have only just started to pay attention to cryptocurrencies, meaning that the speculative fervor surrounding Bitcoin and its peers will keep growing for the time being. Major financial institutions are now jumping on the bandwagon to profit from what has become the hottest asset of 2017, which will only sharply increase the speculative activity in cryptocurrencies.

A Bitcoin investment fund exists called Bitcoin Investment Trust(NASDAQOTH:GBTC). It gives investors the ability to gain exposure to Bitcoin, while providing similar flexibility to that associated with owning a stock or ETF.

There is a slew of other cryptocurrency-related financial products on their way. Derivatives market maker CME Group Inc. has announced the introduction of Bitcoin futures, while Cboe Options Exchange and investment bank Cantor Fitzgerald have flagged plans to list financial products offering exposure to cryptocurrencies.

Premier Wall says thoughts with families of those hurt in Northern Sask. plane crash

  Premier Wall says thoughts with families of those hurt in Northern Sask. plane crash Premier Wall says thoughts with families of those hurt in Northern Sask. plane crashThe plane, which was carrying 22 passengers and three crew aboard crashed shortly after takeoff from Fond du Lac, but no fatalities are reported. On Thursday morning, Wall took to Twitter to issue a statement on the crash.

Markets are complex systems - and there is mounting evidence that they have reached a critical state. See how and why the next 'avalanche' could be triggered . Visualizing the Journey to ,000 Bitcoin . How did Bitcoin jump 10X in value in the matter of just 11 months? This tim Read More+.

Bitcoin Crashing My Life Is Over! THIS WILL TRIGGER THE NEXT FINANCIAL CRISIS AND STOCK MARKET CRASH - Duration: 17:17. Financial Education 11,055 views.

While it is claimed that these products will boost liquidity and reduce the extreme price volatility associated with Bitcoin, they also increase the risk of contagion. It is here where cryptocurrencies could pose a threat to the stability of other financial markets, despite only having a combined market cap that is a fraction of that for other asset classes.

The advent of exchange-traded cryptocurrency products will boost speculative activity, while significantly expanding the volume of money being pumped into cryptocurrencies. This will not only fuel the bubble but also expand their influence in what are already heavily interdependent financial markets. As the volume and value of cryptocurrency-related financial products grow, their tentacles will spread further throughout the financial system, significantly increasing the risk of contagion when the bubble bursts.

Because it is impossible to determine what Bitcoin or other cryptocurrencies are truly worth, along with a significant lack of regulation, it will be impossible to really know what derivatives have been chained to them. That means the fallout from the cryptocurrency bubble bursting could be far greater than many pundits anticipate.

Bitcoin more akin to gambling than investing:Poloz

  Bitcoin more akin to gambling than investing:Poloz Bank of Canada governor Stephen Poloz is sounding the alarm on Bitcoin, calling the purchase of the cryptocurrency "closer to gambling than investing."RY

The crash will push investors into gold, silver and the likes of bitcoin , according to the gold analyst. House prices across Britain and in other markets Several measures also point to inflated stock and bond markets . GETTY. The next crash could be even bigger than 2008, according to Mike Maloney.

Flynn News Ignored By Investors. Bitcoin In Turmoil? Daily Booyah. Financial Advisor Center. 2017's Best Stocks. Let's look at the S&P 500, the volatility index, and what will be the trigger or event that sends stock markets around the world to new multi-year lows.

Just like during the U.S. housing meltdown, the end of the cryptocurrency bubble could trigger a cascading series of market crises that would grow in volume, eventually triggering a massive market correction.

So what?

While the end of the Bitcoin bubble may be some way off its surging value, substantial volatility and lack of utility combined with the impending groundswell of cryptocurrency-related financial products poses considerable risks to markets. When it bursts, the fallout could spread far and wide, triggering the next market correction.

One of the best means of hedging against this risk is for investors to boost their exposure to defensive stocks like utilities. This is because electric utilities such as Fortis Inc.(TSX:FTS)(NYSE:FTS) are relatively insulated from market downturns because of their wide economic moats, the oligopolistic nature of the industry in which they operate and the inelastic demand for electricity.

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Teen ski racer dies in hospital after Lake Louise crash .
The teen was competing in the Nor-Am Cup ski races when he went off the course and into the netting during an afternoon run.The teen, who has been identified by Alpine Canada as Max Burkhart, was competing in the downhill event at the Nor-Am Cup when he went off the course and into the safety netting during an afternoon run.

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