At the end of September, most major stock market indexes stood at all-time highs. The economy was booming and interest rates, while rising, still remained low by historical standards. Although the economic fundamentals have remained largely unchanged, merely one-month later much has changed in the stock market. The S&P 500 has dropped by nearly 10% this month and, after leading the market higher for the past two years, Nasdaq stocks have taken a beating in October, closing down nearly 15% this month. This performance is the worst of any month since the financial crisis began ten-years ago.
Although Bitcoin has been in existence since 2009, it was originally touted amongst a relatively small group of passionate believers while remaining largely unknown to the general public. Over time, public enthusiasm surrounding Bitcoin and other cryptocurrencies has surged and the price has risen exponentially, attracting many amateur "investors" and speculators. Millennials in particular seem to be fascinated by Bitcoin and other perceived beneficiaries of blockchain technology. As a result, the price of a Bitcoin has skyrocketed by over 3,000% in the past two years. During this period, there have been six occasions when the price has corrected by at least 25%. In one particularly volatile day recently the intra-day price plunged by 50% before recovering to close down 10%.
In the past few years, we have witnessed a regular pattern of online security breaches. In the corporate world, high profile companies such as Target, Home Depot and Sony have been hacked. In 2014, private celebrity photos and other private data were hacked via a breach of Apple’s iCloud service. The federal government has also been targeted, as earlier this year the Office of Personnel Management reported that 22 million electronic personnel records and security-clearance files were stolen.