The value of the cryptocurrencies is fluctuating every moment. That is why investors still consider these cryptocurrencies are very new with supreme returns.
Ethereum’s value was all-time high over $400 in June but fell lower $200 for the first time since May 30. Furthermore, Bitcoin’s price correction wiped off closely $4billion in its market price.
Bobby Lee, CEO of the Bitcoin exchange told CNBC that the true value has yet to be discovered. He states in a Hong Kong conference, “If you think about it, the volatility is natural for an asset class that is so new. There’s no price discovery for it (yet).”
He explains that people need to discover the true value of the digital currency bitcoin. They have a tendency to trade these assets at a firm, promotional level before market analysis it could be worth more and this a time when the price jumps.
After getting legalized in several countries, the currencies have seen a significant rise in the popularity. Such as Japan legalized the bitcoins as a payment method.
Managing director of Hong Kong-based commodities and digital currency trading house Dave Chapman says, “We now sort of at … a tipping point, where people are now considering bitcoin or ethereum or digital assets as more mainstream.” And,” A lot of the people that we service are actually very comfortable with having 1 percent of their net worth into bitcoin as it is considered to be the best way to invest in bitcoin.”
He also adds, “There’s no other asset class in the world that could’ve given you the historic performance of this sector … the historic performance, which is obviously not representative of future earnings, … does appeal to a lot of people.”
For situation: $100 of Bitcoin credited in 2010 is now worth more than $75 million.
The analyst has made mixed estimations about these digital asset’s values and market cap as well. According to the BTCC’s Lee experience, the market cap for the Bitcoin will hit at least $trillion by 2025. He says, “I think it’s going to go to at least $1 trillion, if not maybe $10 trillion in the next five to ten years.”
Bitcoin’s current market cap is about $38.55 billion on supply and around 16 million in circulation. Whereas, the total supply of the bitcoin is 21 million. According to Lee, “In a grand of scheme of things, it’s nothing. Many, many companies are worth way more than that.” Furthermore, tech companies already have their market cap in billions or trillions of dollars.
Regulations may help to increase the credibility of these digital assets. Accordingly, Japan, Russia, and China are introducing new regulations.
In the end, Chapman also added that a number of investors have a fear of loss. That’s why they are still not ready for bitcoin investment in the digital currency market.
“We get a lot of people who are like ‘You know what? I still don’t believe in this experiment. I’m not really a believer, but I’m tired of sitting on the sidelines and missing out.”