There was much celebration for bitcoin investors in Beijing and Hong Kong as the digital currency exceeds the $10,000 mark. While there was jubilation, on one hand, fueling further greed for some of its investors, there is also in equal measure a sense of fear and dread on what the future has in store for bitcoin.
Investors both in Beijing and Hong Kong yesterday welcomed the bitcoin $10,000 rally with lots of wine and beer. But after the cheers and raves comes the question for investors: will they give in to fear or respond to greed?
Leonhard Weese, president of the Bitcoin Association of Hong Kong said: “Once it hit $3,000 it was clear that this would go up fast. I guess it will go up even faster from here until the bubble pops.”
Some are deciding to get out while they are still ahead. An investor in the steel-producing city of Anshan in China’s northeastern Liaoning province, who only gave his family name He to South China Morning Post said: “Be careful when others are greedy and greedy when others are fearful. The more it rockets, the more I wonder what the real value is to support such prices.”
He has sold all of his bitcoin holdings earlier this month. He has a not so upbeat forecast for the digital currency: “The party will be over when the price is too high to draw new capital and that’s when plugging will be the only option left.”
Hong Kong-based bitcoin investor and adviser Joseph Wang, on the other hand, has no plans of selling his bitcoin holdings for now. He said: “It is just looking at the long term. Bitcoin is going to change the world. In the short term, it will crash a lot. You shouldn’t buy with the money you can’t afford to lose.”
As of 11 am Hong Kong time on Wednesday, bitcoin was trading for $10,160 on the widely-quoted Bitstamp exchange based in Luxembourg. Other major bitcoin platforms in China, Korea, and Japan also placed the bitcoin at the $10,000 mark.
Bitcoin is the most popular of the cryptocurrencies family that has divided governments, central banks, and investors. Proponents envision the bitcoin to eventually serve as an alternative, if not the future replacement for, fiat money as we know it. The bitcoin skeptics, however, say it is only one in a long line of speculative bubbles.
Investors have been pouring in money for the digital currency. Similar to other digital currencies, bitcoin uses blockchain technology, which stores transactions in transparent, shared databases. Such transparency is meant to protect transactions from deletion, tampering, and revision and also eliminates the need for central exchanges.
Virtual currency trading has been under serious regulatory scrutiny in the world. Even China’s central bank banned in September fundraising through digital currencies, describing the practice as illegal. The People’s Bank of China (PBOC)stated that a staggering 90 percent of initial coin offerings launched in China were eventually found to be fraudulent. China also instructed all bitcoin exchanges to stop trading altogether.