"Bitcoin is a bubble."
"Maybe Bitcoin is a kind of a bubble."
"A dangerous, speculative bubble."
That might actually be true. This is Bitcoin's multiple price rising over the past three years.
Eight other famous asset bubbles, three years before they peaked and burst.
Bitcoin is riding right up to perhaps the most famous bubble of all, the Tulip Mania. And to be fair, it does have all the signs big signs of a bubble. The rapid pace of movements, a whole lot of speculation without sufficient understanding of the risks and people who would not otherwise invest are looking to get their skin in the Bitcoin game. The CBOE, CME Group, Nasdaq are even planning to launch Bitcoin Futures. The same move the Dutch pulled just before the crash in the 1630s. For every asset bubble it is the same story, otherwise level headed people will drive prices for certain assets to unexplainable heights whether that is the price of Beanie Babies, stocks, houses or perhaps cryptocurrencies. Since its inception the price of Bitcoin has gone up 50 fold, if it were to maintain that same rate of growth, its market capitalization would eclipse the US economy in the few years from now, that is why some experts are saying that Bitcoin's rapid and accelerating price appreciation is unsustainable. What it comes down to is the rate of returns, for stocks that is the dividends, in real estates we are looking at the rent, with bonds that is coupons, but for Bitcoin there is actually zero intrinsic value. It generates no income aside from an expectation of a more price appreciation. So it is valuable because people think it is valuable. Even if you do not even buy the whole bubble narrative, the veteran trader Art Cashin says 'the technicals do not lie, Bitcoin has gone parabolic so that usually does not end well'. It is pretty hard to ignore the math, the velocity of move does indicate the Bitcoin's price has gone parabolic and well, parabole moves just don't last.
"Maybe Bitcoin is a kind of a bubble."
"A dangerous, speculative bubble."
That might actually be true. This is Bitcoin's multiple price rising over the past three years.
Eight other famous asset bubbles, three years before they peaked and burst.
Bitcoin is riding right up to perhaps the most famous bubble of all, the Tulip Mania. And to be fair, it does have all the signs big signs of a bubble. The rapid pace of movements, a whole lot of speculation without sufficient understanding of the risks and people who would not otherwise invest are looking to get their skin in the Bitcoin game. The CBOE, CME Group, Nasdaq are even planning to launch Bitcoin Futures. The same move the Dutch pulled just before the crash in the 1630s. For every asset bubble it is the same story, otherwise level headed people will drive prices for certain assets to unexplainable heights whether that is the price of Beanie Babies, stocks, houses or perhaps cryptocurrencies. Since its inception the price of Bitcoin has gone up 50 fold, if it were to maintain that same rate of growth, its market capitalization would eclipse the US economy in the few years from now, that is why some experts are saying that Bitcoin's rapid and accelerating price appreciation is unsustainable. What it comes down to is the rate of returns, for stocks that is the dividends, in real estates we are looking at the rent, with bonds that is coupons, but for Bitcoin there is actually zero intrinsic value. It generates no income aside from an expectation of a more price appreciation. So it is valuable because people think it is valuable. Even if you do not even buy the whole bubble narrative, the veteran trader Art Cashin says 'the technicals do not lie, Bitcoin has gone parabolic so that usually does not end well'. It is pretty hard to ignore the math, the velocity of move does indicate the Bitcoin's price has gone parabolic and well, parabole moves just don't last.
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