Yesterday Bitcoin surpassed the magical figure of $10,000 for the first time. This takes the price increase of the cryptocurrency over 1,000% this year. That means that Bitcoin has increased in value by over 10 times since last December.
The optimism and enthusiasm that has captured investors’ imagination is bringing the ‘crypto asset’ to the mainstream despite mounting warnings that this is all a bubble. To be fair, towards the end of 2017, it is increasingly hard to find markets that are not in bubble territory.
And while Bitcoin is testing the limits of this much feared concept other more ‘mundane’ markets cannot shy away from the fact that they are well past any realistic and sensible peak. The bond market for instance; the coupon that is received should at the very least cover the average market credit loss rate. Still the Market iBoxx EUR Liquid High Yield Index currently yields 3.7% which just barely covers high yield risks as determined by Moody’s data between 1920 and 2008.
Similarly, The S&P 500 has been going through the current bull market since 2009 and during this period the index has gained 288 percent, or an average of 40 percent annually. So the argument is...
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