Here’s what’s happening with the Bitcoin Situation in Singapore: A Commentary
Likened by many to the dot com and tulip bubble, Bitcoin has been in the limelight across all news globally. The soaring prices of bitcoin, launch of bitcoin futures, as well as the push for cryptocurrency Exchange Traded Funds (ETFs) have generated much public interest. With the December bonus coming up, many are trying to create their own Bitcoin wallet to join the craze before it goes bust.
Bitcoin ATM failures
In Singapore, two out of the three Bitcoin ATMs, located at Hong Lim Complex and Tiong Bahru Plaza respectively, crashed for three days due to the soaring prices. Four years ago, the Bitcoin ATM was replenished three times a week. Now, replenishment has increased to three times a day. CoinHako, a company based in Singapore and originally founded in Silicon Valley, has also downgraded and halted many of its services to cope with the spike in interest. Xfers, an online payment provider, also disabled a lot of key features such as wallet topups and new user sign ups in preparation of service upgrades.
Furthermore, hackers are infecting computers and websites with cryptocurrency mining malware and cryptojacking. Just within Fortinet’s web filtering services, there has been 100, 000 cryptojacking hits from Singapore over the past month. According to the Cyber Security Agency of Singapore (CSA) advisory, if your computer is performing exceptionally slower recently, this may be due to the mining software hogging about 60% of your computer’s computational power. It is no wonder that hacking is increasingly an issue. According to estimates by anti-virus firm Kaspersky’s researchers, a 4,000-machine network can reap its owners up to US$30,000 (S$40,600) a month. Besides hardware degradation, information theft and hijacking may also be a concern.
Growing bubble risk
Besides the overwhelming electricity usage and tax evasion concerns, the potential social problems stemming from the bursting of the Bitcoin bubble will be severe as ill-informed high risk investors dump a large percentage of their savings blindly, in search of quick gains. Many believe that they can get out just in time before the burst despite the crashing of websites that can disable transactions for hours at a time.
This cryptocurrency has been likened to digital gold, except that unlike gold, this comparatively young digital currency has not proven to withstand its value in recessions, is extremely volatile, and is likely to crash at any time. This poses obvious social issues for the risk takers who have invested a large percentage of their savings, or worse, took loans to fund this ticking time bomb. However, with the media amplifying the almost unbelievable overnight gains and the sprouting of numerous new Bitcoin millionaires, it is no wonder that people are dumping in money out of pure FOMO (Fear Of Missing Out).
ICOs: Scam or Investment Opportunity?
Bitcoin’s surge and the start of futures contracts have given Bitcoin some legitimacy and enabled a larger crowd to take part in the exchange. This has livened up the cryptocurrency sphere and its rise has also trickled down drastically to other alternate currencies such as Ripple, Monero and IOTA. Investors who think that the growth of Bitcoin has peaked or maxed out, and are hoping to invest in the next ‘Bitcoin’, have invested in alternate currencies. Ethereum (or ether), for instance, rose rapidly since the Swiss banking giant UBS, along with other banking industry heavyweights, announced their plans to use the ethereum network as a means of complying with new regulations scheduled to go live in the EU on 3rd January next year. Litecoin also experienced tremendous growth, and more than doubled its value within a single day. Beyond investor interest, this jump may also be due to Litecoin’s faster speed especially when compared against Bitcoin’s clogged up network, the lower fees as well as the ease of purchase through Coinbase. Of course, numerous scam Initial Coin Offering (ICO) has happened. Take Confido as an example, this ‘cryptocurrency’ disappeared with $375, 000 from an ICO.
Uncertain future of Bitcoin Price
Unsurprisingly, Bitcoin’s price prediction is ever changing. Some think that it will rise to 100,000 before crashing to 0, whereas others believe that it will become a multitrillion dollar asset. One thing that we can all agree on is that cryptocurrencies can no longer be ignored, and are gradually becoming more mainstream. The blockchain technology behind it proves to be impactful and has garnered interest from many key stakeholders. Whenever making an investment, be prepared to lose every single cent.