Volatile Crypto-Currency Markets Make Some Wonder About Their Long-Term Future

101471964-475512651.530x298It has been a wild ride so far for Bitcoin and other, similar crypto-currencies. Originally created and overseen by a mysterious programming genius who went by the pseudonym of Satoshi Nakamoto, the grandfather of all crypto-currencies remains the one that most attention focuses on. At the same time, a number of would-be contenders have also popped up, leaving many to suggest that one of them will eventually take over the spotlight.

At the same time, the ultimate viability and durability of the whole crypto-currency phenomenon remains in question. When valued in terms of such stable, traditional currencies as the American dollar or Japanese yen, crypto-currencies can seem incredibly volatile. Although it is hard to get specific in this way, for example, many observers believe that in even the most active markets, single buyers or sellers are capable of causing prices to move by twenty percent or more.

What that means for the future of these crypto-currencies is hard to say. Broader adoption, along with greater acceptance by merchants and the building of other bridges to physical-world value, would likely calm these fluctuations to an extent. At the same time, it seems unlikely that the massive virtual fortunes that were reaped by some of the early adopters of many of these currencies are going to dissipate anytime soon. If that is the case, it likely means that a few people will continue to wield outsized power when it comes to the regular price fluctuations of any of these currencies.

Given that fact, it becomes harder to see how any of these currencies can make a claim to being safe, productive harbors for investment by others. Pouring dollars into a crypto-currency market might make good sense as a way of speculating on short-term movements, but few investors are going to have the fortitude to stick out such swings over the longer term. That is not to say that no crypto-currency can ever become a contender with regard to stability and probity compared to real-world alternatives, but that the way forward at this point is, at the very least and if one even exists, not exactly clear.

Comments are closed.