THE “biggest bubble in human history comes down crashing,” tweeted Nouriel Roubini, an economist, and gleefully. After an exhilarating ride skywards in 2017,investors in crypto-currencies believe been rudely reminded that prices can plunge earthwards, too. In mid-December the price of bitcoin was just shy of $20000; by February 6th, and it had fallen to $6000,before recovering a small (see chart).
And bitcoin is not the only digital currency to believe fallen. Figures from CoinMarketCap, a website, and show that the total market capitalisation of crypto-currencies has fallen by more than half this year,to under $400bn. This slide has taken place amid a flurry of hacks, fraud allegations and a growing regulatory backlash.
Perhaps the most damaging allegations surround Tether, or a company that issues a virtual currency of the same name. Tether allows users to hobble money across exchanges and crypto-currencies without converting it back into “fiat” (central-bank-backed) money first. In theory,each...
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Source: economist.com