Bitcoin is like a blue chip, and is traded as a second-rate speculative share

This year turned out to be successful for the stock market. But for bitcoin, he was even more successful.
The segment of the crypto currency is experiencing a boom in rush demand, fueled by factors such as the now-in-place primary placement of tokens (ICO) and the growing popularity of crypto currency in Japan and South Korea. As of last Friday, the bitcoin rate showed an increase for the current year by an impressive 352%. Only 4 companies whose shares are quoted on US exchanges were able to surpass this result: PolarityTE (+ 735%), AVEO Pharmaceuticals (+ 604%), Straight Path Communications (+ 431%) and Calithera Biosciences (+ 362%).
Of course, bitcoin is fundamentally different from shares – there is no Bitcoin Inc., which distributes profit between investors. However, there is one notable feature that relates this crypto-currency with the four companies mentioned above: speculation. Three of the four companies belong to the biotech sector, in which a sharp increase in shares may be triggered by progress in the development of one key active ingredient. As for Straight Path, it has benefited from a fierce competitive bout, arranged around it by two potential buyers – Verizon Communications and AT & T.
Like many shares of the biotech sector, the cost of bitcoin is inextricably linked with speculation. The course of this crypto currency has demonstrated such a dizzying takeoff that it is time to seriously think about what buyers actually get for the $ 4300 they have laid out, and why they need to keep the bitcoins. At the same time, one should not forget about the main competitor of bitcoin, the etherium, the situation with which is even more impressive: for this year, the air has risen in price by more than 4000%. Such crazy rally can not help turning heads of traders.
“Since 2009, the S & P 500 index has demonstrated extremely high results, but we are seeing a drop in volatility, trading volumes and general interest from investors,” comments Arthur Hayes, CEO of the Bitmex exchange. “Volatility is a daily bread and a source of vitality for traders and crypto-currency markets. And so, although volatility limits the scope of practical application and the value of bitcoin in everyday trading, it does not cease to attract the increased attention of traders, at the same time. ”
Certainly, there is some skepticism regarding bitcoin, but its volatility and spectacular growth this year have aroused genuine interest from traditional capital markets. Not long ago, the LedgerX crypto-exchange platform became the first private company to obtain the official permission of the US Commodity Futures Trading Commission (CFTC) to launch the exchange and the clearing center for trading crypto options. The Chicago Option Exchange (OCSE) is now awaiting regulatory approval of its initiative, within which it intends to include bitcoin futures in its quotation lists. Several interest groups continue to seek permission from the Securities and Exchange Commission (SEC) to launch the ETF for bitcoin.
All these events and processes further strengthen the sense of the coming “bitcoin moment”, which only spurs the further rise in prices for the crypto currency. As a result of this year’s rally, the total capitalization of the bitcoin market reached $ 71.5 billion. At these levels, it is closer to the value of such long-established companies as Nike ($ 71 billion) or Caterpillar ($ 68 billion), rather than to the market capitalization of PolarityTE ($ 159 million) . However, it is important to remember that while bitcoin trades more like Polarity and other secondary speculative shares, rather than as “blue chips”.

Leave a Reply

Your email address will not be published. Required fields are marked *