Bitcoin speculation is back – and as risky as ever

Hamish McRae: ‘The immediate reason for the surge in price is that it has become much easier to buy and sell cryptocurrencies’

The parallel with gold is a helpful way of analysing what is happening. The immediate reason for the surge in price is that it has become much easier to buy and sell cryptocurrencies., or ETFs, to trade in it. That made it possible to get exposure to bitcoin without having to own it. It is as though you don’t have to buy a physical chunk of gold but can still benefit if the price climbs.. ; that increase in price will in turn suck in more buyers.

Does this matter? Maybe not, but there are two crucial differences between gold and any asset that exists as a series of digits on computers. One is that it has been around much longer. The first use of gold as money, as opposed to simply being an ornament or jewellery, seems to have been around 700 BCE.

Actually, US equities also feel a bit of a bubble at the moment, accounting for 60.5 per cent of the world market, as the “One is that valuations are not extreme. The S&P500 index is in a trailing price/earnings ratio of 28, which is high by historical standards of the mean of 16. There is a link here

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