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Can cryptocurrency mania end like Wall Street Crash of 1929? — RT Business News

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Bitcoin and the cryptocurrency market plunged by almost a third this week. What could this mean for the future of digital money? Analysts, polled by RT are divided on the matter.

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© Global Look Press

“Despite the declared advantages of cryptocurrencies (security, anonymity, and de-regulation), the same pros have become cons that the currency should not have,” TeleTrade financial consultant Mikhail Grachev told RT.

Anonymity makes it possible to pay for prohibited items – drugs, weapons, says the analyst. The lack of regulation leads to a lack of responsibility, and if any controversial issue arises, it will hang in the air, he added.

“And the most important argument is that bitcoin, etherium and others cryptocurrencies, are quoted in US dollars, and no one has given up on the greenback in favor of a combination of digital symbols,” Grachev said.

The cryptocurrency market is going to crash, when people who invested on the dawn of the boom, will cash out, says the analyst.

“Cryptocurrencies can repeat the history of the 1929 stock market crash. Some say the recent collapse of bitcoin is attributed to the cancellation of its hardfork (SegWit2x), others say investors are fleeing bitcoin and buying bitcoin cash. It is possible that the year will close at levels near BTCUSD $7,500,” Grachev said.

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© Manuel Romano / Global Look Press

Mikhail Mashchenko, an analyst at the social network for investors eToro in Russia and CIS has the opposite view. He is sure virtual money is here to stay.

The cryptocurrency market is very deep, and different currencies offer different solutions for investors, it is not only about bitcoin.

“IOTA crypto is about microtransactions without commissions. Ethereum is good for “smart contracts,” dash and the like are autonomous and so on. Bitcoin is used not only as a financial asset or as a means of exchange, but also as an alternative currency necessary for investing in competitive and complementary projects of the cryptocurrency industry,” he told RT.

The analyst is sure that as long as blockchain-based technologies continue to emerge, the industry will grow and bitcoin has a bright future.

Bitcoin is also highly unlikely to end like the Wall Street Crash of 1929, and doesn’t resemble other stock market crashes either, insists Mashchenko.

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© Kim Hong-Ji

“Comparing bitcoins with the bubbles of the past is pointless: nothing like this has happened. Tulip Mania is different. Tulips were luxury goods for a narrow circle of people, and not for widespread use. The crises of 1929 and 2008 are very similar to each other, but have nothing to do with cryptocurrencies,” he said.

The dot-com bubble is more or less close to cryptocurrencies, the analyst admits, but the best companies of the dot-com era of 1997-2001 are prospering in 2017, having significantly increased their market cap.

However, bitcoin can be a very risky for first-time investors, the analyst warns.

“They do not know the elementary rules of trading and therefore buy at the highest prices and close their positions in panic at the slightest drop. A huge percentage of these people will lose money.”

For more stories on economy & finance visit RT’s business section



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