TIME: Bitcoin – launched 2009
Regions: Global phenomenon
Size: Heading for a total of $1trn in 2018 but has collapsed to half that value
The first bitcoins were mined in 2009. At the same time, the blockchain database on which cryptocurrency operates was devised by the mysterious Satoshi Nakamoto. It emerged as a result of rising frustration with the established banking system following the global financial crisis.
It ticked along quietly for a few years. There was a slight upturn in interest in 2013, when unit prices rose strongly, but it really sprung into life in 2017.
Approximately 550 cryptocurrencies began trading in 2017, some of which have not survived. There were huge price increases in 2017 for the longer-established Litecoin, Ethereum, Bitcoin and Ripple currencies, followed by a bumpy ride in 2018 and sharp downturns at the end of this summer.
Anyone can launch a cryptocurrency. One that has been successful exclusively in Australia is Dentacoin, which people use to pay for expensive dental treatments. As the number of cryptocurrencies grows, some firms offer digital wallets, in which investors can put all their virtual currency and see the information all in one place.
The market is also starting to attract the attention of regulators, and rules differ widely from state to state. In some places they are regulated as assets but not currencies, while elsewhere they can be severely restricted.
Wealthy investors’ enthusiasm for digital currencies took off last year. According to a survey by Capgemini, 29% of millionaires are ‘highly interested’ in buying or holding cryptocurrencies and nearly 27% are ‘somewhat interested’.
Only a third of those surveyed said they had received information about cryptocurrencies from their wealth managers. Though this is a wakeup call for advisers to get to grips with the sector, the sharp downturn since the survey is likely to have dampened enthusiasm.
