Cryptocurrencies such as Bitcoin are on the verge of a major bull market, according to some analysts who follow digital money. Earlier this week, the price of one Bitcoin reached a record high of $3,500, which dramatically increased the value of smaller digital currencies. The current value of the digital currency market is bigger than the Royal Bank of Scotland and Goldman Sachs combined, according to Reuters.
However, some speculators believe the digital currency market is in a prime position for the bubble to burst. The market has seen extraordinary growth over the past year, with new initial coin offerings, known as “ICOs”, popping up every month. Many of the new coin offerings achieve an instant value, causing many investors to jump into the market hoping to make fast money.
Statistics show that the digital currency market was worth $17.5 billion at the beginning of 2017. Bitcoin made up 90 percent of the entire market value. Today, the current value of the digital currency market is at a staggering $120 billion, with Bitcoin accounting for 46 percent of the market.
Last week developers created a clone of Bitcoin known as Bitcoin cash. In less than 24 hours, this new digital currency was valued at $12 billion. The fear among financial analysts is the values are based purely on public perception with no fundamentals behind the actual value.
Billionaire investor Howard Marks compares the current digital currency fad to the dot-com bubble in the late 90s’ and early 2000s’. Marks correctly predicted the crash of the dot-com era, and he believes that the current state of digital currency is just a fad. Marks also stated the values are unfounded and only worth what people are willing to pay for something that has little to no underlying value. Many advocates of the digital currency market disagree with Marks, proclaiming that 2017 is just the start of a massive bull run.