Cryptocurrency’s cryptic future
Cryptocurrency, or crypto for short, has emerged from the murky waters of uncertainty to rapidly generate much speculative interest.
Today, the market capitalisation of cryptocurrency assets such as bitcoin, ethereum and Binance coin, has grown ten times since early 2020 to US$2.6 trillion, or nearly 1% of the value of global financial assets. More than 2 million people hold various forms of crypto.
However recent events must give exuberant early adopters and investors pause to reflect. In December 2021, the Bank of England issued a warning that bitcoin could be worthless and that investors may lose everything.
This came after a sell-off in early November 2021 after a coronavirus variant announcement, knocking bitcoin from a then US$68,000 peak. Two Australian-based cryptocurrency exchanges – digital marketplaces that facilitate buying and selling of crypto – have also collapsed resulting in tens of millions in investor losses, amid calls for greater regulation of this industry.
While crypto is here to stay, will its future resemble its past?
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