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Wednesday, 13 December 2017 | MYT 12:00 AM

Bitcoin prices ‘bubble-like’ after record rally, says BlackRock

HONG KONG: With bitcoin prices up 17-fold this year and sitting above the US$16,000 mark, valuations for the cryptocurrency are in “extreme” territory, according to BlackRock Inc.

“We are seeing sort of bubble-like valuations,” Belinda Boa, the money manager’s head of active investments for Asia-Pacific, told reporters in Hong Kong.

“BlackRock’s view is that this isn’t a financial asset like we would trade in terms of equities and fixed-income instruments.”

BlackRock joins other major financial services firms which have weighed in on bitcoin’s meteoric rise this year amid increasing mainstream acceptance.

Bitcoin futures contracts made their debut on Cboe Global Markets Inc’s exchange late Sunday, and CME Group Inc is set to launch similar products on Dec 18.

“I don’t know where it will end, but as much as you and I are talking, it’s going to be the biggest bubble and it will collapse,” said Prem Watsa, chief executive of Toronto-based Fairfax Financial Holdings Ltd, in an interview.

“I’m sure it will collapse, but will it happen in the next month or two or three, who knows?”

Watsa said he hadn’t invested in bitcoin and had no plans to do so.

“The higher valuations go, the more likely we are to see some volatility in that space,” BlackRock’s Boa said.

“What we’re seeing in bitcoin and some of the cryptocurrencies, we have seen huge moves in asset prices. I would therefore expect that we will see a lot more volatility in the future.” — Bloomberg