Wilson Sy isn’t a fan of Bitcoin: One day the bubble will burst
Stock market guru Wilson Sy doesn’t plan to invest in Bitcoin or other cryptocurrencies that have become the hottest investment among speculators and traders looking to ride on the new get rich quick scheme.
Sy admits that he doesn’t know Bitcoin and one golden rule he adheres to in his 42 years obsession of always making the right money play is never to go into stocks or investments that he does not know.
In a recent forum, Sy said: “But what I know is digital currency) is a demand and supply situation: it can go to any price they want because supply is limited.”
“It’s a purely demand and supply which is something I don’t understand. But if you have a demand that is so huge and a supply so small, which is controlled, you can name your price,” he added.
Bitcoin shot up to an all-time high of $7,848 last week after starting the year at only $1,000.
But Sy believes that the digital currency is headed for an imminent collapse.
“One day. the bubble will burst. I don’t know when because I don’t know enough. The biggest risk is you really can’t quantify it’s true value. It’s just demand and supply and you are dependent on main proponents or investors,” said Sy.
“As usal, many investors get sucked in because of the allure of a quick buck,” he added.
Before putting your hard-earned peso into bitcoins, take this advice from Forbes contributor and business growth expert Adam Hartung: “Unless you are a professional trader, or you simply want to gamble, stay away from Bitcoins. They have no inherent value, because they are a currency which represents value rather than having value themselves. The Bitcoin currency is not managed by any government agency, nor is it backed by any government. Bitcoin values are purely dependent upon holders having faith they will continue to have value. Right now the market looks a lot more like tulip mania than careful investing.”
Bitcoin was introduced in 2009 by a shadowy entity, Satoshi Nakamoto, who ignited people’s interest in developing a digital currency out of the reach of traditional financial regulators like the Bangko Sentral ng Pilipinas.
Digital currency is used to settle on-line transactions with their value controlled through block-chain technology mechanism which makes sure their users really own that much digital currency to prevent double-counting.