I’m a currency expert – here’s why unstable Bitcoin is not worth your investment
THE price of Bitcoin has smashed through $100,000 for the first time — fuelled by the return of Donald Trump.
The world’s first, largest and most valuable cryptocurrency has now more than doubled in value since the start of the year.
And it has been most dramatic since November, surging by more than 50 per cent since Trump’s election win.
During the election campaign, the Republican pledged to make the US the “crypto capital of the planet” and build a strategic reserve of Bitcoin, while also setting up his own crypto- currency venture.
He has appointed Elon Musk as head of the new Department of Government Efficiency (DOGE) in an explicit nod to the tech boss’s favoured crypto, Dogecoin.
The frenzy around digital currency has been given an even bigger boost after Trump nominated Paul Atkins, a big crypto advocate, to run the main US regulator, the Securities and Exchange Commission.
The appointment will mark a dramatic shift from outgoing SEC boss Gary Gensler, who led a crypto crackdown.
In the US, exchange-traded funds investing in crypto- currency are now backed by the biggest investment managers, such as Blackrock, which has £35billion put into Bitcoin.
In the UK, there are no regulatory safeguards for crypto investors, with the financial watchdog telling Brits last week they had to be prepared “to lose all their money”.
Around 7million adults in the UK already hold some form of digital currency.
Carol Alexander, finance professor at Sussex University, accurately predicted the $100,000 record last month.
She told The Sun yesterday: “I think in the next year it will hit $200,000.
“It will remain volatile, but Trump is a hugely bullish factor in Bitcoin.”
Prof Alexander also notes crypto’s downsides, and successfully predicted a previous crash due to a fraud scandal.
By Eswar Prasad, Professor at Cornell University
BITCOIN’S surge to $100,000 is a staggering price for a virtual object that is nothing more than computer code.
Crypto currencies have been on a wild ride, surging and tumbling sharply based on little more than a post by Elon Musk.
There have been massive swings in their value in recent years.
While the total value of the crypto- currency market is now over $3trillion, it is worth remembering that nearly $1trillion was wiped off its valuation three years ago.
As an asset class it is unstable — it is as though a £10 note could buy you a beer on one day and a bottle of fine wine on another.
It has no intrinsic value and is not backed by anything.
Bitcoin devotees will tell you that, like gold, its value comes from its scarcity.
But scarcity by itself can hardly be a source of value.
Bitcoin investors seem to be relying on the “greater fool” theory — all you need to profit from an investment is to find someone willing to buy the asset at an even higher price.
As with any speculative bubble, naive investors who come to the party late are at greatest risk of losses.
The Government should certainly caution retail investors that they act at their own peril.
Sophisticated investors may tap into the benefits but the danger is the less well-off, dazzled by new technologies, will take on risks they do not fully comprehend.
M&S REBUILD OK
MARKS & SPENCER will be allowed to demolish and rebuild its Marble Arch store after a battle that has become a litmus test for the new Government’s planning reforms.
Deputy PM Angela Rayner yesterday granted permission after ex-Housing Secretary Michael Gove blocked plans on environmental grounds.
M&S argued the store is “impossible to modernise” and threatened to quit the site on London’s fading Oxford Street.
CEO Stuart Machin said the “flagship M&S store will support 2,000 jobs”.
VODA 3 ’N’ EASY
VODAFONE and THREE will create the UK’s biggest mobile operator after a £16.5billion merger got the green light.
The Competition and Markets Authority approved it on the condition the combined firm invests £11billion in the UK’s 5G network and caps certain mobile tariffs for three years.
Rival BT raised competition fears but Vodafone’s CEO, Margherita Della Valle, insisted it would “unlock investment”.
Analyst Kester Mann, of CCS Insight, called it “one of the most significant moments in the history of UK mobile”.
SALES OF E-CARS UP TO 1 IN 4
ELECTRIC cars accounted for one-in-four vehicles sold last month, with petrol versions plunging to an all-time low, according to industry figures.
Battery-powered vehicle sales were 58.4 per cent higher than last year, with 38,581 sold in November, equivalent to 25.1 per cent of the market.
But the Society for Motor Manufacturers and Traders said the number of petrol vehicles given to dealerships was rationed — and an “unsustainable” £4billion in discounts had been given on e-vehicles so far this year.
Manufacturers have been racing to comply with a 22 per cent Government mandate on annual sales of electric cars to avoid hefty penalties.
The SMMT says even with a strong November and December, sales will still be short.
Ford UK boss Lisa Brankin this week called for more Government incentives as it launched an electric version of its best-seller Puma car.
SHELL IN MERGER
SHELL and Equinor say they will combine their offshore oil and gas assets in the North Sea, forming a new company with 1,300 employees.
Based in Aberdeen, it will become the North Sea’s biggest oil and gas producer — expected to produce more than 140,000 barrels of oil per day.
Shell said there will be no job losses as a result of the deal and that it could “enhance” the longevity of its 1,000 UK jobs in oil and gas.
FASHION ‘ESPIONAGE’ BOOHOODUNNIT
POLICE have launched a probe into claims of stalking and “corporate espionage” of several Boohoo executives.
The online fashion retailer has complained that co-founder Mahmud Kamani, former boss John Lyttle and new chief executive Dan Finley have all been targeted.
They claim the trio have been followed near their homes and offices in London, Manchester and Sevenoaks, Kent.
A complaint about surveillance equipment outside offices has also been made.
The perpetrators’ identity is unconfirmed.
The astonishing claims, which have caused “serious alarm and distress”, were first reported by The Times.
It comes amid a bitter boardroom battle between Boohoo and Mike Ashley’s Fraser Group — and an investor showdown later this month.
Frasers’ chief executive, Michael Murray, yesterday told The Sun that he “wouldn’t comment on media speculation” about corporate espionage.
But when asked about the attempted Boohoo boardroom coup, he said: “When firms destroy shareholder value, we will not sit back.”