Bitcoin FOMO

THE BAREFOOT VC \ NOVEMBER 2017

We will be sending out a weekly newsletter with news and brief commentary on the blockchain and cryptocurrency sectors. It is our intent to cut through the increasing levels of noise and bring you thoughts and articles that we find interesting.

Bitcoin reached $11K this week before retreating back to 4-digit territory. It’s important to note that a fair amount of the recent capital in the market is driven by speculation from the astronomical returns that cryptocurrencies have achieved in 2017, and a “fear of missing out.” True alpha returns have been difficult to achieve in the globally low interest-rate environment and softening of many real estate markets, all factors that have been fuel for cryptocurrency market cap growth. Many of these investors have not experienced the price volatility that many earlier investors have, and it remains to be seen how a significant shock to the market will be handled by these investors. However, there are other, newer investors who are believers in the concept of a more decentralized transaction system, particularly in light of increased cybersecurity risks, as well as widespread geopolitical uncertainty. Additionally, many early investors in bitcoin and ethereum have either held or reinvested profits into other cryptocurrencies.

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