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CRYPTOCURRENCIES - A Roller Coaster with no Seat Belt

As you have been aware, the price of cryptocurrencies, and especially

Bitcoin, have felt by half from a peak last December when it reached a value of $19,500 per “coin.”

When the price was soaring in December, everybody was obsessed. But as of Wednesday, Bitcoin was trading below $9,500 in a dramatic drop losing one third of its value in just two days. (As of Friday afternoon, it was up to $11,750.) A clear reminder of the speculative nature of these types of products. As I wrote last month, cryptocurrencies were designed to make digital transactions. Unlike conventional currencies, there is no central bank that controls its value. Instead, the cryptocurrencies are managed through a descentralized accounting system known as blockchain, and its value is governed purely by market forces. So far, a parallel world to the financial market. In the meantime, its regulation and security are main concerns for everyone. As an example, today three virtual currencies operators where sued by U.S. CFTC for fraud. Meanwhile on Wall Street, the stock market continues unstoppable. The Dow Jones, S&P500 and Nasdaq indexes ended the week with a positive trend growing +0.95%, +1.54% and +1.53% respectively from last Friday. The barrel of crude closed the week up at 63.64 USD per barrel; the yield on 10-year Treasury bonds closed at 2.64%; gold is quoted at $ 1,331.40 per ounce, the euro closed at a rate of 1.22 euros / USD and, finally, bitcoin closed at $ 11,361.78.

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