Cryptocurrencies still alive, new ones appear

In mid-February, bitcoin and other cryptocurrencies started recovering from the bloodbath they experienced in late 2017 – early 2018. By February 5, bitcoin lost almost 65% of its value and returned to its November 2017 levels. But over the subsequent two weeks its price rose by more than 60% and crossed the USD 11,500 level on its way up. The Internet is full of talk about a mysterious investor who recently bought $400 million worth of bitcoins.

In the last couple of days, bitcoin has been fluctuating around the USD 10,000 level. It looks as if the idea of a currency based on the blockchain technology is far from dead.

At the same time, this technology is not the easiest to understand and cryptocurrencies based on blockchain are often said to represent nothing. One currency, Peblik, which is only now starting to gain traction, claims to be understandable for everyone. Its web site says that Peblik is valued, in particular, against some Canadian-based proven underground mineral asset.

Among the first questions that prudent investors would need to ask themselves and the Peblik team would be the methods to value the underground assets used as a basis for Peblik’s value. Apart from the valuation methods, Peblik will face risks stemming from the shocks that, for instance, the Canadian junior mineral exploration industry has gone through, and in many cases is still going through. The S&P/TSX Venture Composite Index, which is heavily based on early- stage mineral companies, still cannot nearly recover from its 80% drop which followed the last peak of the commodity cycle posted exactly seven years ago.

It is obvious that the brave new world of cryptocurrencies is full of risks. But the basics of investing say that there is no return without risk.

Ukrainian Credit Union Limited