Current cryptocurrencies have no backing assets and have little commercial use given their total value.
Most owners are betting on the currency increasing in value, not using it for commerce.
This means the cryptocurrency is really just a speculation and, given no government oversight or rules, there can be market manipulation, fraud on a staggering scale, plus boom and bust cycles.
For example, the Mt Gox bitcoin exchange handled 70% of the world’s bitcoin at one stage but it “lost” a whopping 7% to fraud.
If you’re thinking of buying cryptocurrency, get in early and sell not too late and you may make money; get in late or sell late and you will probably lose money.
There certainly is a boom in bitcoin right now but if history repeats then there will be a significant drop in 2018.
If you are thinking of buying bitcoin, then do your homework, don’t just buy on a get-rich-quick impulse.
Look at historical graphs to get a feel for how prices fluctuate and what is happening across various cryptocurrencies (for example, coindesk.com/price), such as bitcoin, Litecoin, Ethereum and Ripple.
Read and learn what commentators are saying about crypto, including the grumpy ones, not just the enthusiastic ones!