As Bitcoin continues to soar in valuation, new investors are joining the craze, even if they don’t initially have the money to pay for the cryptocurrency.
Securities regulator Joseph Borg says he has seen people doing everything from running up credit card debt to mortgaging their homes to pour money into the cryptocurrency.
It’s easy, from one angle, to see why. Bitcoin started out the year being worth $1,000. On Nov. 20, Bitcoin set a new record by passing the $8,000 mark. As of mid-morning Tuesday, it was worth over $17,000. Very few investments double their value in just 22 days.
But Bitcoin is the very definition of a volatile investment. The current rate of investment in Bitcoin is bound to eventually result in a sell off as investors reap their profits.
“You’re on this mania curve,” Borg told CNBC. “At some point in time there’s got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don’t know.”
Even if Bitcoin is here to stay, it’s worth noting that it still remains unregulated. Hackers have been showing an increasing interest in pilfering it from people’s Bitcoin wallets. Earlier this month, thieves stole an estimated $64 million in cryptocurrency.