Cryptocurrencies have been on a gigantic rise this year. However, they don't really hold any intrinsic value and their prices are linked to government policies that have not been well defined to this date. Any change in government policies can cause cryptocurrencies to fluctuate wildly. Recently, China declared all initial coin offerings (ICOs) illegal. The price of bitcoin, ethereum, and other digital currencies tanked as a result. You can think of ICOs as IPOs of many different online currencies. The creator launches a currency for a specific purpose and sells them to buyers who are willing to buy, There's been so new currencies recently. Burger King in Russia launched their own WhopperCoin. This reminds me of the times during 1999, when all these startups were IPOing and their business model wasn't well established. The People's Bank of China said that these new ICOs were all unapproved illegal public financing and were concerned about illegally raised funds. These digital currencies all started because people wanted anonymity or didn't trust their government's currency. The original use of these currencies were so that the people in the transaction couldn't be traced and were dealing with illegal activities. Countries such as Venezuela have also relied on mining as an additional source of income since inflation in their country has been out of control. Recently though, investing bitcoin and ethereum have been seen as a way to get rich. More and more people have gotten into the currency in the hope of it increasing in price. So far, the US government has just said that digital curriencies are treated as common investments. Who knows when the US government will have a specific policy on cryptocurrencies, but it may be a good ideas to sell a couple shares of this new digital asset as the price is currently high.
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