First Bitcoin, and now Bitcoin Futures are dominating discussions on financial and social media. With no end to this trend in sight, word has come in from Joseph Borg, the president of the North American Securities Administrators Association, which is a voluntary organization devoted to investor protection. He is very concerned about the latest Bitcoin development.
Borg is also the director of the Alabama Securities Commission, and in an interview with “Power Lunch” on CNBC, he spoke his mind on the frenzy surrounding Bitcoin. (Source: People are taking out mortgages to buy bitcoin, says securities regulator, CNBC, December 12, 2017).
He is worried as he sees people taking out mortgages and advances on credit cards to buy Bitcoin. He also said that it is an alarming fact that guys making about $100,000 a year, with a mortgage and kids in college are investing in this skyrocketing digital currency, which is something they should not be doing at all.
He further added that there is “this mania curve and at some point, there is got to be a leveling off.” He, however, stated that cryptocurrency and blockchain are here to stay.
What is going to cause a lot of pain, though, is the fact that people are looking at Bitcoin as a get-rich-quick scheme, which could hurt a lot of investors. This is something that investors should think about before doing those credit cards and equity lines.
A number of critics have voiced their opinions in the past about the fact that digital currencies are unlikely to be supported by authorities who like to control their money supply. And sooner or later, there would be a clamp down on these cryptocurrencies once the authorities are convinced that these are a threat to their existence. The ultra-popular Bitcoin is likely to be their top target.
Sooner or later, regulations shall follow to tame this digital beast, and that would be the time of chaos and panic. And then Joseph Borg’s view about Bitcoin being in a “mania phase” may come true as such developments shall lead to high volatility and a potential crash in Bitcoin prices. Till then, however, there is no stopping this frenzy.