The price of bitcoin surged 2,000% to more than $19,000 in mid-December. However, the cryptocurrency and its cousins suffered a massive sell-off over the past several weeks. It price fell below $7,000 on February 5.
Nouriel Roubini, a well-known economist, called bitcoin the biggest bubble in human history.” He predicted that the price of the digital currency will drop to zero.
Billionaire investor Paul Singer recently called cryptocurrencies as “one of the most brilliant scams in history.” He compared digital currencies to an empty black box.
Cryptocurrencies are tricky investment targets
Furthermore, Turnbill described cryptocurrencies as “tricky investment targets” because of its nature. He cited the fact that digital currencies are facing big challenges including:
- dramatic price swings
- weak regulation
- security flaws at exchanges and other end point
Moreover, he also pointed out that valuation is difficult because cryptocurrencies have no cash flow, earnings or interest rate. Their uses vary from a speculative bet to payment system.
