[토픽] [Topic 2] 7th Feb. 2018

[Brett]

Bitcoin biggest bubble in history, says economist who predicted 2008 crash

Nouriel Roubini calls cryptocurrency the ‘mother of all bubbles’ as it falls below $8,000

The economist credited with predicting the 2008 global financial crisis said a 12% fall in the value of bitcoin on

Friday was the latest proof that the cryptocurrency was the biggest bubble in history and destined for a crash.

Nouriel Roubini, professor of economics at New York University, said bitcoin was “the mother of all bubbles”

favoured by “charlatans and swindlers” as it fell below $8,000 (£5,600) early on Friday, marking a 30% drop

since the beginning of the week as investors became increasingly twitchy about a clampdown on cryptocurrencies by regulators. Later it rallied, climbing back over $8,600 by 3pm (GMT).

Bitcoin has lost more than half its value since hitting a peak of near $20,000 in the week before Christmas.

Dubbed “Dr Doom”, Roubini said the sharp fall was the beginning of a crash that would see the value of the

digital currency plummet “all the way down to zero”.

The latest sell-off follows reports that US regulators are investigating whether the spike in the price of bitcoin

in 2017 was the result of market manipulation. India’s finance minister said the country did not recognise the

cryptocurrency as legal tender, pledging to fight their use for “illegitimate activities”.

Digital currencies have also been hit by the news that Facebook is banning all adverts for cryptocurrencies.

Ethereum, ripple, litecoin and other digital currencies all suffered double-digit percentage falls on Friday as investors took fright.

“Policymakers and regulators are getting worried. Pretty much every G20 policymaker is talking about a crackdown,” Roubini told Bloomberg Television. “We can’t allow it to become the next Swiss bank account for use by criminals and people evading tax.”

He added that the 1,300 cryptocurrencies or initial coin offerings currently in existence were “a scam”. “Most

of them are even worse [than bitcoin] and don’t have any intrinsic value like bitcoin. So if bitcoin is a bubble,

it’s a bubble to the power of two or three.”

Critics have warned that bitcoin has all the hallmarks of a classic speculative bubble that could burst, like the dotcom boom and the US sub-prime housing crash that triggered the global financial crisis. Last year it rose in value by more than 900%, making it the best performing asset of 2017.

Robert Shiller, the Nobel prize-winning economist, said last week that while bitcoin was a “really clever idea”,

it would not become a permanent part of the financial world.

“I tend to think of bitcoin as an experiment. It is an interesting experiment, but it’s not a permanent feature of

our lives,” he said, speaking at the World Economic Forum in Davos.

Bitcoin is not recognised by any central bank and currently allows people to bypass banks and traditional

payment methods to pay for goods and services. Banks and other financial institutions have been concerned about bitcoin’s early associations with money laundering and online crime, and it has not been adopted by

any government.

However, the spike in the price is forcing regulators and institutions to consider how to respond.

Jon Cunliffe, deputy governor for financial stability at the Bank of England, has said that bitcoin is too small

to pose a risk to the global economy. However, he warned that investors should “do their homework” before

backing the digital currency.

(Additional Information)

Bitcoin faces a global backlash from regulators and governments

• India’s finance minister said this week that the country does not recognise cryptocurrencies as legal tender and would take action against their use in funding “illegitimate activities”.

• US regulators are investigating the Bitfinex exchange and a cryptocurrency company called Tether. They are questioning whether tether, whose coins are used to trade digital currency, are backed by US dollars as it claims.

• Facebook has banned bitcoin and other cryptocurrency adverts on its site.

• South Korea announced at the end of December that it was planning a crackdown on trading in the digital currency, preparing a ban on opening anonymous cryptocurrency accounts and new legislation to enable regulators to close coin exchanges if they felt there was a need to do so.

• UK prime minister Theresa May said last week she was concerned that criminals were taking advantage of digital currencies. “In areas like cryptocurrencies, like bitcoin, we should be looking at these very seriously,” she said.

• Steven Mnuchin, US treasury secretary, signalled that bitcoin and cryptocurrencies would be subject to greater regulatory scrutiny in the world’s largest economy.

Source from

The Guardian

© 2018 Guardian News and Media Limited or its affiliated companies. All rights reserved.

https://www.theguardian.com/technology/2018/feb/02/bitcoin-biggest-bubble-in-history-says-economist-who-predicted-2008-crash

[Questions]

1. Have you heard of anyone around you investing the money to the bitcoin? And what is the result of the investment?

2. As the economists insisted, many people and several countries are worried about the volitility and the bitcoin(and

cryptocurrency) is regarded as a kind of scam or highly risky asset at least. What is your opinion on this reputation?

3. How do you understand the bitcoin (and cryptocurrency)? 

4. Do you have any plan to invest your money in the cryptocurrency market even in the risky situation & considering

the warning of the renouned economists and financial specialists? And why?

5. There's some special words about bitcoin market like 가즈아, 김프, 떡상, 떡락, 투더문.  Do you know the meaning?

6. Why do you think Korean market had too much premium before Korean government announced to regulate?

What is the reason that many young people in Korea are paying attention to the bitcoin market even though it has too

much risk and government even announced that it should be banned or regulated?

7. Some people says that the bitcoin & blcok-chain is one of the major part of 4th industries while many of the other

people says it is the means of the speculation only. What do you think about the future of the cryptocurrency?

8. What do you think is the best way to invest your money? Saving in the bank, Fund, Real Estate, Stock market or ...?