Bitcoin and company. How big is the cryptocurrency market?

Bitcoin, Etherum, Ripple, Litecoin ... You could exchange it for a long time - how long? About this in a moment. The cryptocurrency market is a fashionable topic and there is actually no week without any mention of virtual currencies in the media. How broad is the market and why is it so popular?

Volatility - a speculator's friend

The flesh-and-blood speculator is not interested in whether something will grow or fall, or whether the economy will flourish. The goals are not essential. Only volatility is important, which helps in making a profit. The greater the amplitude of the fluctuations, the greater the rate of return in a shorter time. So it is not crucial what is happening - it is important that it "swings" the course.

And that's actually the answer to the question why Bitcoin gained so much popularity in the world. The first large-scale reports about BTC appeared in the media about 4 years ago, although it was introduced to the market in 2009. Some articles have been dressed in amazing stories, e.g. "In four years he became a millionaire doing nothing" and "For 5000 Bitcoins purchased in 2009, you can now buy ... a house!" (to find on the web).

Do you need better advertising here? It must work on the imagination.

The next step is to check historical records.

May 25, 2016 - BTC costs money 443$
May 25, 2017 - BTC costs money 2400$

Counting fast ... 1967 USD, which is the rate of return exceeding 440% in a year! And yet we have not yet considered the possibility of negotiating such a transaction. In addition, there are opportunities for quick earnings on mini-caches. For example, 25 has just dropped the rate and from a fixed maximum at 2726 $ in the next three days went down fixing the local hole at 1710 $. It's a drop by almost 40% through 3 sessions.

Over 900 cryptocurrency in the world!

Yes, it's not a mistake. You can find a list over the network 900 various cryptocurrenciesthat are currently on the market. Total capitalization exceeds 100 billion USD. By comparison, there are only 185 official national currencies in circulation worldwide. As you can see, the theme has become extremely fashionable, but its scale is starting to frighten. A full list of cryptocurrencies can be found on the website Coin Market Cap. The list has bizarre names such as Clinton or UFO Coin. But it is also not a problem to find such "instruments" that recorded 3-digit rates of return during the week.

10 cryptocurrency with the largest capitalization (click to enlarge).

They followed the trend Forex brokers. Last year, selected companies began introducing BTC against the dollar and other popular cryptocurrencies to their offer. This week, the first brokerage house also decided to take such a step - X-Trade Brokers. Intuition tells me that we will not have to wait long for a similar decision to be taken by other brokers. Demand raises supply, and even traders like to follow fashion. All the more so if it gives you the opportunity to make a big profit.

The cryptocurrency market - a speculative bubble or the future?

The world is changing every day, but does the cryptocurrency market make any sense? In Germany and Switzerland, Bitcoin is recognized as a legal currency that can be used in private transactions. Meanwhile, Thailand is the first country to declare it illegal. It is also forbidden to buy and sell them. In Poland, the Ministry of Finance denies Bitcoin the status of a currency.

Due to the lack of regulation of this market, criminals often use virtual currencies to transfer funds. A perfect example is the marauding virus that blocks access to the computer - Petya., where hackers expect a transfer to be sent to BTC for its removal.

After all, the price of Bitcoin is constantly growing in the long term. So, are we dealing with a speculative bubble? If so, when will it break? And how will it end? Or maybe we are observing the future in which electronic currencies will replace these traditional ones? The problem is that it is difficult to really answer the question of what fundamental factors depend on the valuation of virtual currencies.

One thing is for sure. Investments in the cryptocurrency market are currently highly risky and highly speculative. There is also a non-trade risk related to the broker /exchange. At the beginning of the year, the Polish Bitcurex exchange (10 users) disappeared from the market. There is no doubt that such situations will repeat themselves in a completely unregulated market.