The UK economy has a history of a recession in every decade. This tends to affect most investment classes - property, shares, businesses and Bullion. As we head into the next recession one of the interesting questions is how will the recession affect crypto currencies such as Bitcoin.
I’m not an economist. I’m an investor and as such I look for patterns and trends that help me decide where the economy is heading and where to invest my money for the best return. I also tend to stick with old fashioned investments that I can physically hold - Property, Shares, Business and Bullion. This doesn’t stop me watching other investments and crypto currencies are going through an interesting transition in particular Bitcoin.
There’s no doubt in my mind that crypto currencies are the future. With the monopoly of banks and the lack of trust in them it’s easy to see why an alternative form of unregulated currencies is attractive world wide. Corruption and lack of faith in governments means that anything that operates outside government and banking system is very attractive to the main population who feel they are taking back control of their money. On the downside it is ideal for criminals and money laundering as it is untraceable.
Bitcoin, the first and best known crypto currency has continually been in the news in recent weeks as the value of a Bitcoin has soared in value. So, has it hit the high and has the bubble burst on this Investment opportunity?
Just 12 months ago a Bitcoin was worth $900 by the 17th December it hit a high of $19,580 a Bitcoin and today just a week later the value is $15,770. But is this a lull while we all enjoy Christmas festivities or has the bubble burst on Bitcoin?
Crypto Currencies are in uncharted territory. They are too new to have a track record of performance. It’s impossible to say how they will perform in turbulent times.
All investments have a cycle. While they are out of favour there are good returns to be made. Once they come back into favour and the general public start pouring money into them they quickly hit a peak and start declining. Bitcoin has very much come into the public domain in recent weeks. Banks will let you buy Bitcoin on a credit card. Shops are offering payment in Bitcoin even houses and businesses are for sale in Bitcoin only.
Governments are keen to start controlling it with Israel becoming the first country to ban trading in Bitcoin. Will this encourage the black market to grow even more and the value to spiral even higher.
Bitcoin is currently out of the price range for the average person. Will it price itself off the market or become so exclusive that only the extremely wealthy can afford it?
One thing is certain it will be fascinating watching what happens to Bitcoin and similar currencies in 2018.