From MarketWatch
While bitcoin has been on a tear, don’t call it a bubble.Read the rest here: http://www.marketwatch.com/story/3-reasons-why-bitcoins-surge-may-not-be-a-bubble-2017-06-02So says OfTwoMinds.com financial blogger Charles Hugh Smith in his latest post.
Below are three key points from Smith’s take on the hot virtual currency.
- Bitcoin has an actual purpose: Cryptocurrencies are not like Beanie Babies, because they have utility value — namely, they facilitate international payments for goods and services, Smith says.
He is hardly alone in making that point. The Economist notes that bitcoin BTCUSD, -2.25% aspires to be a means of exchange like the dollar DXY, -0.55% , rather than just a form of digital gold GLD, +0.74% .
Chinese investors have used bitcoin to get money out of that country and are seen as helping drive its price higher.
- It’s a WYSIWYG market, not a scam: The primary cryptocurrencies are based on transparent rules and are not a scam, says Smith, whose take served as our Need to Know column’s call of the day.
It’s a “what you see is what you get” market, he writes, using a computing term that is abbreviated WYSIWG and pronounced “wizzy wig.”
That means both the buyer and seller know all there is to know about the exchange, Smith says. That’s not true of rackets like offloading a package of toxic mortgages as a mortgage-backed security.
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