Proponents of blockchain technology have pointed to the disruptive power this technology holds to completely revolutionize financial markets in the future. Holding aside issues surrounding black market activities, a lack of regulation, and concerns that perhaps one of the largest bubbles financial markets have seen in some time may turn out to be a cataclysmic trigger, sitting back and watching the pandemonium ensue is interesting for a number of reasons.
What is particularly interesting about the meteoric rise in the value of Bitcoin and other cryptocurrencies is the acceptance among many cautioning investors of an absurd bubble that the cryptocurrency space likely has a lot more room to run. Often compared to the Tulip Bulb bubble of the early 1600's in Holland, the idea that bitcoin could have just begun a rise to $100,000 or $1,000,000 per bitcoin may not seem so far-fetched. After all, in the early 17th century in Holland, prices among some of the rarest tulip bulbs required as much as six years' annual salary for an average person during that time. Falling to a tiny fraction of its peak, this bubble is an instructive lesson on the potential pitfalls of speculation and "herd-mentality" investing.
The question of which stage we are now at in terms of a cryptocurrency bubble, if a bubble really exists, and whether or not to jump in feet first into trading cryptocurrencies will likely be the talk of the town for the time being.
That said, perhaps the best move in this scenario would be to heed the advice of Warren Buffett - stick to investing in what you understand, rather than what is glamorous.
Invest wisely, my friends.
