Just a little over a week after its price went over $9,000, Bitcoin on Tuesday once again made history by climbing 3.86 percent and crossing $12,000. Trading prices from Tuesday price bump have given Bitcoin a market capitalization of nearly $203 billion which further represents a historic rise in valuation of about 1,100 percent since the beginning of 2017. All this has been amid speculation that the extensive adoption and use of futures will facilitate the legitimization of decentralized digital currencies and, ultimately, mainstream use by investors. There has been increased optimism pertaining to the distributed ledger technology, blockchain, that is a vital component of Bitcoin – even though there are still warnings about the speculative mania that revolves around Bitcoin which implies that it merely an asset bubble that will burst eventually. The lack of government backing seems to be at the heart of Bitcoin’s volatility hence the doubts.
According to hedge fund manager Mike Novogratz, “This is a bubble and there is a lot of froth. This is going to be the biggest bubble of our lifetimes.”
Novogratz is not the only one who still thinks the Bitcoin doomsday is nigh – Dennis Gartman, who is considered the biggest Bitcoin bear, still won’t bite despite Cboe Global Markets announcing that it would be venturing into Bitcoin futures trading beginning Sunday. Gartman’s major worry when it comes to Bitcoin is the cryptocurrency’s volatility, something that he says “frightens him.” This he attributes to the difficulty that comes with margining a currency that regularly shifts from 15 to 20 percent. In light of the new developments and Cboe Global Market giving Bitcoin some sense of legitimacy, Gartman still believes Bitcoin has a long way to go before he finally gives it a thumb up;
“When they begin to pay taxes on it, when it ceases to be an avenue for avoiding taxes, when it ceases to be a place where drug dealers are trading and making transactions, then I’ll be interested,” he said.