FX CRYPTOCURRENCIES
a sudden bout of profit taking fear slipped into the market place and panic selling took over. As prices collapsed reality set in for so many that they had given up everything they owned for a flower bulb. During the mania, tulip bulbs were selling for the value of a large estate and was 10 times more
than the
annual income of a skilled work.
After
the collapse it had fallen to the price of an onion.
To risk getting hung drawn and quartered by the bitcoin bulls out there I will say I do see some similarities to the current bitcoins craze and tulip mania. Firstly, in the 1630’S tulip bulbs were being sold physically and was a leading export for Holland. As they became more popular, speculators jumped on the band wagon and prices skyrocketed. The general public then got involved hoping to make a fortune on the back of success stories and then pop, it all burst. Those who were involved with Bitcoin in its early days were tech savvy individuals
12 FX TRADER MAGAZINE January - March 2018
who understood what it was and what its purpose was.
Now we have speculators jumping in and every person on the street has heard about bitcoin and wants to get involved. I just hope that those
go to cash out and exchange their bitcoins they have bought back to dollars or euros, because who is to say that the banks will accept the transfer? Who is to say that the banks will be happy to play ball and who is to say they will be able to when they have to follow strict AML laws?
But to pacify the bitcoin bulls, though I do eventually see some form of crash, I can’t see bitcoin ever d isa p p ea r i n g or becoming worthless.
It
Tulip Mania is in many ways the closest market event we can look back on and compare the current bitcoin’s skyrocket journey to
speculators haven’t sold their family home to be part of it like many did in Holland during tulip mania.
I do see a potential issue arising when those investors who have bought into the crypto crazy train
is here now; its real purpose has been released and the true potential of the technology behind it has yet to be fully
utilized. Its future may still be unclear but it has a future and what an exciting future that could be.
James Trescothick
Senior Global Strategist EasyMarkets
https://en.wikipedia.org/wiki/2012%E2%80%9313_Cypriot_financial_crisis https://en.wikipedia.org/wiki/Mt._Gox https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Silk_Road_(marketplace)
https://www.reuters.com/article/us-greece-russia-cyber-extradition/greek-court-clears-u- sextradition-of-russian-bitcoin-fraud-suspect-idUSKCN1C90QR
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