A major fund manager claims we are in the midst of a virtual currency bubble, and like all bubbles, it will eventually burst.
The altitude of virtual currencies has broken through incredible levels in recent weeks. Bitcoin price has more than tripled in value, going from $900 in Jan 2017, to over $2,700.
The newest name breaking through is Ethereum which has seen its price has risen from under $8 in January 2017, to $350 currently, a mind numbing gain of several thousand percent.
Gold Rush Hysteria
Peter Denious, head of global venture capital at Aberdeen Asset Management sees things differently however.
Speaking to financial news service «Bloomberg» Denious said «Prices right now aren’t being driven by network usage, they’re being driven by speculation that tokens are going to appreciate. It’s a gold-rush mentality.»
Not Sustainable
Although Aberdeen’s venture capital arm, which has about $1.8 billion entrusted in early stage funds, is considering investing in funds that hold blockchain-based companies and digital coins, it remains cautious.
The fund manager maintains the cryptocurrency boom that’s attracting millions into startups and spurring triple-digit gains in their digital tokens isn’t sustainable.
«A lot of lessons will be learned and a lot money will be lost,» added Denious.