Bitcoin crosses $5000 mark on rumors of Goldman Sachs offering

Despite risks, cryptocurrencies are gaining popularity every day. More than half a dozen appreciated by 1000 per cent last year and on 13th October 2017 Bitcoin breached the $5000 mark for the first time.

Written by Sandip Sen | Published: October 13, 2017 2:39:59 pm
Bitcoins, cryptocurrencies, high profit investments, Bitcoin rate, Goldman Sachs, Mt Gox scandal, Business news, Indian Express The value of Bitcoin jumed 8 per cent on Thursday to 00 (File)

The value of the world’s most favored cryptocurrency, Bitcoin, jumped by 8 per cent to scale the $5000 mark on Thursday. Soon after China’s ban, JP Morgan CFO Jamie Dimon had criticised Bitcoin and called it a fraudulous last month. The digital currency suffered a temporary blip and doomsday predictors called it the end of Bitcoin. But maverick investors remained bullish and now there are rumors that competitor and arch rival Goldman Sachs is reportedly considering offering Bitcoin on its trading platform.

Bitcoin or any other cryptocurrency investments are no doubt risky. But for every Mt Gox scandal there are a number of success stories. If that had not been the case with cryptocurrencies, they would not have reached mind-boggling heights it has today.

Why Bitcoin investment are worthwhile

If it was a Ponzi scheme as many claim, there would not be some of the greatest investors like Bill Gates, Richard Branson and Ratan Tata putting their money on it. Besides big banks like Bank of Tokyo Mishubishi UFJ ( BTMU) and six other banks including Merril Lynch and Bank of America are reportedly planning to use Blockchains for low cost international fund transfers in 2018.

The $460 million Mt Gox scandal broke in 2014 because Mark Karpeles, the geek who was also the CEO, tried to own the company single-handedly. It is said that he owned 88 per cent of equity, gave no equity to his employees, and tried to control all technology decisions. The hacking of accounts at Mt Gox was done based on internally leaked information about the system bugs, though it was apparently done by external hackers.

Available locally but pricey

The challenge for the small and early investor is to look at which cryptocurrency to buy, where to buy the crypto- currency from and how to ensure its safety. If you are in India you have currently a single choice of buying cryptocurrencies through a local bank account. How to start investing in cryptocurrencies?

You can buy Bitcoins through your Indian credit and debit card through Zebpay without too much hassle. However, the biggest problem in buying Bitcoins from Zebpay is the high volatility globally that gets compounded in the Indian market. The buying price of Bitcoin last week was Rs 295,000 Just a couple of days later it has now jumped to Rs3.48,666 thanks to the global price surge. Fees and real time prices in India are higher than other global exchanges like GDAX, Kraken, Gemini or Bitfinex but convenience is much more, because Indian credit and debit cards can be used.

Other cryptocurrencies that are worthwhile

Ever since the price of Bitcoin skyrocketed this summer, investors have been thinking of alternate avenues. As per CoinDesk, the cryptocurrency newsdesk, it was not only Bitcoin but Ethereum, Litecoin, Monero, and Ethereum Classic which appreciated phenomenally (above 1000 per cent) last year. As an early investor if you want to invest in any of these you must start your research before putting your money on the table. Never ever put your money on the table before you do preliminary research on your Blockchain investment.

You must also understand that each cryptocurrency has a different purpose. While the Bitcoin digital currency is for the common investor where you get a decentralised currency, with Etherum you get a piece of power that runs decentralized apps and smart contracts. High risk, high gain investments: Welcome to the wonderland of cryptocurrencies

The attraction of Bitcoin is that it is devised as a limited currency by the designers and there will not be more than 21 million in circulation. But that will take almost 150 years to happen if at all, so there is no need to panic. Also remember that the Blockchain is only a process driven accounting ledger, so spin off currencies like Bitcoin cash can always be devised with more block size capacity. But it is the process control that is as important as the technology in its success. When the Big Banks like Goldman start taking interest in Cryptocurrencies that is bound to happen.

Views expressed by the author are personal. Readers are advised to use their own judgement when investing.

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