Displaying items by tag: bubble

(Los Angeles)

PIMCO says there is one really big thing to fear in markets above all else—the lack of fear. The current “melt up” is symptomatic of extreme investor confidence, and that is cause for grave concern, says PIMCO, one of the world’s largest money managers. According to PIMCO, “The fact that the fear is gone is the main reason why we should be worried”, continuing “That means most investors are now pretty fully invested and that means they will want to get out if the markets start to correct -- exacerbating the downdraft”.

FINSUM: We think PIMCO has a great point. The market’s start to this year is pretty insane—it is on track to triple in value in 2018. Is this the final run before a big downturn?

(New York)

A few weeks ago bitcoin was trading at over $20,000 on some exchanges. No it is trading below $9,500. Critics of the cryptocurrency are taking the big fall as vindication of their view, while others are sticking to bitcoin. Other cryptocurrencies slid big too, with ethereum and litecoin both falling around 30%. “The crypto craze is morphing into a crypto crash, from Bitcoin mania to Bitcoin bust”, says a trading analyst, continuing that “that there is no level at which value players step in” when a bubble is bursting.

FINSUM: One of the big problems with bitcoin, as opposed to say the cotton bubbles of American history, is that there is no fundamental underlying economic value of the currency, so there is no potential bottom other than zero.

(New York)

The end of the exciting but short-lived Bitcoin era may be upon us. As everyone will know, the cryptocurrency surged this year by around 2000%, from $1,000 up to $20,000. However, after worries and threats of regulation, bitcoin has fallen back steeply and is now trading at around $10,000 or just half what it was a few weeks ago. One prominent fund manager commented on bitcoin that “Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble”.

FINSUM: It is next to impossible to forecast what bitcoin will do, but it should be noted that the cryptocurrency has bounced back from 50% drops before in this big rally.