Crypto Mania

     There is something going on in the world of Finance that just cannot be ignored. It's very confusing and most experts admit that they don't understand it either. I'm talking about cryptocurrencies like Bitcoin. I have to admit that I know almost nothing about the technology and the currency but I would feel remiss if I didn't at least address it in this blog. First of all, Bitcoin is just one of many cryptocurrencies out there. Another popular "token" is called Ethereum. I called it a token because that is the technology that allows them to be bought, sold, and traded. There are currently about 1200 cryptocurrencies out there in cyberspace with more offered everyday. They are being introduced by what is called an "initial coin offering". According to the current issue of Barron's magazine (Dec 4,2017), investors have bought 3.6 billion dollars worth of these tokens just in 2017 alone. That's why it shouldn't be ignored. I would highly recommend anyone who is interested in this "mania" to buy a copy of this weeks Barron's to get educated on what is happening. Just to be clear, I do not recommend putting any money into crypto's yet. However, some money managers who I know and respect have considerable amounts of their clients money in Bitcoin. The sheer rocket-like appreciation of Bitcoin is staggering-1000% since the start of the year. Just because there is no basis for this asset to appreciate does not mean that it will stop anytime soon. Sometimes these manias can carry on for years. Some pyramid schemes have been around for many years and are actually listed stocks on the NYSE. Cryptos have been the most popular in some third world countries where there is little confidence in the official currency of the government. But now the mania has overtaken Wall Street and the Chicago Board of Exchange has committed to offer futures trading in Bitcoin in the near future. This gives Bitcoin a small amount of legitimacy, but in no way lessens the risk. According to the Barron's article, $300 billion have poured into crypto market so far. With so many tokens available, no one really knows which cryptocurrency will emerge as the dominate player in this asset class, but Bitcoin looks to have the early lead. It is my belief that the world is heading toward a cashless society sometime in the future so it makes sense that a cryptocurrency will fill most peoples virtual wallet.but I doubt that will happen in my lifetime. In the near future there will be many ETF's, mutual funds, closed ended funds, and other products offered that will mitigate the risks of cryptos. Only then will I be willing to consider an investment in cryptos.