A bubble is "a trade in products or assets with inflated values." Most people associate a bubble with rapidly rising prices of an asset or commodity without any rational underlying rhyme or reason, and the fear is that at some point the bubble will burst, usually leaving ordinary common people who got sucked into the bubble at the end with a worthless investment.
So, is Bitcoin a bubble? Three answers follow:
1. Maybe. You can never identify a bubble as a bubble until it bursts.
2. Yes. Just look at the rate at which the prices have been rising - that's unsustainable. Anything that shows its price doubling every couple of months has to be a bubble.
3. No. If Bitcoin ends up taking even just 1% of the currency market in ten years, it needs to be worth 100,000 dollars a coin at that point. For that value to be reached Bitcoin should be showing rapid value increase, especially in the early days.
Personally, I stand by answer 1. You only know what was truly worth investing in in hindsight. But if I'm honest I do lean a bit towards 3.
No comments:
Post a Comment