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Ethereum is up 10000% in last 16 months

ETHEREUM…. I bet you havent heard about it ? it is the second biggest crypto currency behind Bitcoin ( now famous for wannacry hackers demand) with a market cap of USD 8.4 billion.

At the end of 2015, it was worth $0.90., it’s now worth $91.30. Those who bought it at the end of 2015 had a ten-bagger on their hands by January 16, 2017. I had written an article highlighting the move in cryptocurrency on 26th jan 2017 http://worldoutofwhack.com/?s=cryptocurrency . Those who bought at that time also have ten bagger on their hands. Those that rode it all the way up over the 16 months have a 100-bagger. For percentage fans, that’s a gain of 10,000%.

What miracle “asset” did they get when they bought it? Don’t even ask. Just believe in it. It certainly isn’t a usable currency for legit purposes, obviously, given this kind of insane instability. But it really doesn’t matter what it is as long as it is going up.

The largest one is bitcoin with a “market cap” of nearly $30 billion. I have been personally watching it from $400 wanting to buy it but was not sure about its legitimacy in India hence gave it a pass. The value of a single bitcoin, at $1,789 on Sunday, is 46% higher than the value of one troy ounce of gold ( as it is a much smaller market easy to manipulate ). In mid-May 2015, bitcoin was at $240. Over the two years since, it has soared 645%

This is being played with real money. That it will inflict maximum pain on the latecomers – whenever this happens – is now perfectly clear.

There are over 830 “alt-coins,” as the alternatives to bitcoin are called, out there, with new ones being added constantly. The “market cap” of all these cryptocurrencies combined, according to the Financial Times, has pierced the $50 billion mark. So this starting to involve serious money.

Many of these investors may not be “sophisticated.” But others appear to be highly sophisticated, now that the sums involved have gotten big enough for them. The FT:

Observers say many individuals are trading alt-coins from corporate IT departments, concentrated in the financial sector and falling under the radar of senior executives. Many are sitting on virtual fortunes, but are unable to liquidate their cash as banks clamp down on measures to avoid money laundering.

“Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world,” Brian Lord, former deputy director for intelligence and cyber operations at the UK’s electronic espionage agency GCHQ and now head of cyber practice at security group PGI, told the FT.

Big sophisticated traders – including hedge funds and others – are in this trade, not because it might make some real economic sense, but because, as the charts above show, these things can be pushed up quickly with enough money involved. And if enough new people can be drawn in due to the ballooning hype, then the big boys can get out, once they figure out how to deal with the banks’ concerns about money laundering.

 

Ritesh Jain

4 Comments

  1. Crazy and worrisome to saner traders like us……but history is replete with such mania’s from time immortal….right from tulip mania……to now….cryptocurrencies…..but history is also consistent with the end result of such manias……a gigantic burst….which leaves many financial corpses…..Thanks

  2. Please do a detailed article on the underlying of Ethereum, what are the factors which affects it’s price, and explain it’s brass tacks. Thanks.

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