Virtual Currency Boom

[Anchor Lead]

Virtual currencies, like Bitcoin, may be one of the hottest commodities in the investment industry these days. With a surge in values over the last few months, some analysts say the digital money market seems to be overheating, even as some cryptocurrencies are set to be traded on established financial markets soon. Even the New York Times has reported that a virtual currency boom has hit home in South Korea.

[Pkg]

From teenagers to retirees in their 70s, many ordinary people show keen interest in virtual currencies. The New York Times reported that nowhere has the public frenzy about the digital money been more feverish than in South Korea. It said that despite the fact that South Korea’s population is one-sixth that of the U.S., the amount of transactions between the won and virtual currencies was larger than those between the Korean currency and the greenback. It likened the sudden rise to investment fever, noting that the virtual currency market has remarkably expanded just over a year in South Korea. It is in stark contrast to the cases in the U.S. and China, where virtual currency trading has grown over a number of years. In the U.S., Bitcoin has been plunging since it topped 10,000 U.S. dollars on November 28th. There were news reports that dealings in Bitcoin will begin on Chicago's Board Options Exchange and Board of Trade on December 10th and 18th, respectively. The virtual currency will make its way into the tech-ladden NASDAQ next year.

[Soundbite] Gabor Gurbacs(Director of Digital Asset Strategy, Vaneck)

But warnings are being voiced. Many say the price bubble will inevitably burst, as virtual currencies are not based on the real economy.

[Soundbite] Hilary Kramer(CIO, A&G Capital)

Anyone can make anonymous transactions of virtual currencies with a computer and the Internet. This is why there are continuing concerns that virtual currencies can be used for money laundering or drug dealing. There are also potential hacking risks.