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The Rise of Cryptocurrencies

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Cryptocurrencies have had an unprecedented rise in the global market. According to a recent Forbes Magazine article, approximately $2.3 billion has been raised in Initial Coin Offerings (ICOs) through September 23, 2017. The majority of this capital was raised during 2017. ICOs have overtaken venture capital firms in terms of startup funding contributed to blockchain-based companies. Bitcoin has received the most attention around the world, but hundreds of ICOs have occurred in 2017, with multiple currencies experiencing growth of over 1,000% during the year. For example Bitcoin, Ethereum and Ripple experienced growth of 3,000, 14,400 and 28,000 percent, respectively, during 2017.

Although cryptocurrencies have seen astronomical growth, CEOs of investment firms and banks have taken a firm stance against making investments. Warren Buffett, CEO of Berkshire Hathaway remarked, “You can’t value bitcoin, because it’s not a value-producing asset. Stay away from it; it’s a mirage, basically.” Jamie Dimon, CEO of JP Morgan Chase, has stated that Bitcoin is a fraud, and if an employee of the bank invested in cryptocurrency, it would lead to immediate termination. While Dimon has since stepped back from this statement, many experts in the financial market feel cryptocurrencies are too risky and volatile to invest in. While skeptics continue to warn of a bubble or possible collapse, former JP Morgan Chase Director and current Wall Street strategist, Tom Lee, believes that Bitcoin has the potential to reach a value of $55,000 within the next five years.

This last year saw the rise of cryptocurrencies. It may not be time to invest in them, yet, but it is a great time to start learning about and evaluating their potential risks and rewards. A recent article published by Business Insider provided additional insight into the evolution of bitcoin and blockchain technologies: http://www.businessinsider.com/bitcoin-technology-blockchain-only-halfway-through-its-evolution-2018-1