Bitcoin is like the South Sea Bubble

Snap, crackle and pop goes the weasel

Back in 1720 the English House of Lords passed the South Sea Act and created the South Sea Company a monopoly with South America with shares rising as much as 10 times as speculators lost their marbles and invested in lots of companies with risible prospectuses. The bubble burst and many people that invested as a result of the craziness lost the lot.

Fast forward nearly three hundred years and it looks as though Bitcoin and other cryptocurrencies are prompting bankers to worry that it’s a 21st century bubble that’s about to burst.

Bitcoin  is close to $ 10,000 in value and, according to Reuters, a number of central banks are contemplating launching their own digital currencies or looking to regulate what appears to be out of control berserk currencies. Currently Bitcoin and the rest are completely unregulated as far as the big banks are concerned.

The entire cryptocurrency market is estimated at close to $ 250 billion, small fry compared to the big worldwide banks.

The bankers are also a bit concerned that cryptocurrencies could simply go bust with many countries expressing their concerns although the use of blockchain is a different kettle of fish altogether.

Reuters said that UBS and six other large entities are engaged in an effort to produce digital cash equivalents for the major world currencies. So, apparently is the Bank of England.