Please forward this error screen to 169. RANDS AND SENSE: Recently, cryptocurrencies have received negative media coverage, resulting in considerable volatility in their hedgy bitcoin news. Money generally serves three purposes: it acts as a store of value, it can be used to measure economic value, and it can be used as a medium of exchange.
Fiat money is created by a government, or governments, for use in a country, or a group of countries. How do cryptocurrencies, such as Bitcoin and Ethereum, fit into this concept of money? Anyone can buy cryptocurrencies, and many people are doing so, often for speculative purposes in the hope that they will be able to sell the currency at a profit. In our view, cryptocurrencies should not be seen as a store of value, but only as a means of exchange. Recently, cryptocurrencies have been at the receiving end of some very negative media coverage, which resulted in considerable volatility in their prices, emphasising the point that these currencies do not necessarily retain their value.
China has banned the trade of cryptocurrencies, while JP Morgan Chase has denounced their trade, saying any traders caught trading them will be fired. This makes all cryptocurrencies vulnerable. The next few months should be interesting as the actions of large financial institutions and government regulations set a precedent for where cryptocurrencies are headed. If you have bought cryptocurrency, what should you do now, and should you hedge your exposure? If you are in a position to trade the currency in the short term, there are certainly profits to be made. However, it should not be seen as a wealth-accumulating asset, like equities, which are typically kept for longer periods and may generate a return in the form of dividends.