Not everyone is convinced that bitcoin isn’t a giant bubble ready to burst. Its surging value has created a sort of mania in the market, according to North American Securities Administrators Association president Joseph Borg, who recently told reporters he’s seen people taking out mortgages in order to invest in the cryptocurrency.
Reports Friday (Dec. 15) suggested some business owners are also taking drastic measures to get in on the bitcoin action.
According to Mashable, Florida-based Rich Cigars, a high-end cigar company, is ditching cigars entirely and pivoting its business model toward “aggressive cryptocurrency mining” and patents.
It could prove a lucrative move, at least in the short term. A single bitcoin was valued at more than $17,500 at the time the Mashable article was released and, according to research from the Cambridge Centre for Alternative Finance published earlier this year, bitcoin miners have so far earned more than $2 billion in revenue — most of which was earned in the last few years alone.
Bitcoin mining involves earning a payout for solving cryptographic puzzles linked to bitcoin transactions, a process that acts as a way to confirm the transaction’s legitimacy. Analysts expect revenues from bitcoin mining to continue to increase in the coming months. The U.S. currently holds approximately 16 percent of the market, coming in just behind China’s 58 percent, researchers found.
Analysts and regulators are growing increasingly concerned about bitcoin, particularly because of its value volatility and the ongoing threat of a bubble about to burst as the cryptocurrency’s worth continues to climb. Still, some businesses seem unable to ignore bitcoin’s potential. Earlier this month, reports said eBay may be considering accepting bitcoin as a payment method, following a similar move by Overstock.com to accept the currency.