Bitcoin: another day, another record

Bitcoin: another day, another record

Bitcoin exchange rate soared more than 23%, smashing through the $18,000 benchmark for the first time ever, according to the data from Coinmarketcap. 

The exchange rate surge over the past day amounted to $4,000.

According to, now Bitcoin reached $16,663.18.

On December 6, bitcoin surpassed $12,000 for the first time.

The cryptocurrency began the year below $1,000 but continues to rise despite warnings of a dangerous bubble.

The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, speaking with Vestnik Kavkaza, noted that the rate behavior of bitcoin is a classic financial bubble. "Such a bubble is inflated by speculators, and its growth can be very strong, as more and more speculators are involved in this market. They are not concerned either with the regular drop in the bitcoin price or the ambiguous attitude of regulators around the world. And now the bubble is so huge that one should not expect its growth to continue at the same pace. I think people now assume that bitcoins can be recognized as a financial instrument in many countries, but even US regulators have not yet decided on it," he believes.

"There have been a lot of such financial bubbles in history, especially assets that can be easily bought, like a 17th century Dutch tulip craze. There were similar precedents in the stock market. But the problem is that there is no real economy behind bitcoin, it's virtual crypto currency, there are limited amount of bitcoin - 200 million. So the people get the feeling that due to this bitcoin price will increase indefinitely. However, there is a risk, for example, of closing bitcoin exchanges, so this virtual asset cannot be converted back to money. That is, the future of Bitcoin is not bright, this bubble will burst sometimes," Dmitry Piskulov predicted.

Professor of the RANEPA faculty of Finance, Money Circulation and Credit, Yuri Yudenkov, in turn, agree that now bitcoin is a high risk asset. "In my opinion, the current growth of bitcoin is the result of a powerful advertising campaign: a currency with a limited volume has elicited general interest. As a result, like in the case with any pyramid scheme, its cost is growing. My opinion is that it is exclusively psychological, I see no economic grounds for bitcoin growth," he noted.

"Bitcoin could be compared with MMM due to the fact that this currency has limited circulation and there are many similarities with the pyramid scheme in the absence of an economic reason for the price increase. Buying bitcoins is quite risky, however, this is the law of risk management - the greater the potential financial reward, the higher the risk. As bitcoin shows itself as a highly profitable tool, it is simultaneously a high-risk tool," Yury Yudenkov said.


Vestnik Kavkaza

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