Topic: [2017-06-12] The Bitcoin bubble; Pinpointing where Bitcoin is among... (Read 2479 times)

The web is full of articles and personal opinions labeling Bitcoin’s current high valuation as being in a bubble. Shark Tank star and Dallas Mavericks owner Marc Cuban has been tweeting to his 7 million followers about bitcoin on a regular basis, but says that he believes Bitcoin is currently in a bubble, “I just don't know when or how much it corrects.”

“If there is such a thing as a healthy bubble, this is it,” the Economist stated recently. Forbes predicted that all the recent cryptocurrency gains are one large bubble. From looking at the cryptocurrency trading price patterns this year, it is hard to disagree that it matches the shape of a standard bubble pattern.

In an effort to determine which bubble phase Bitcoin’s price is currently in, BraveNewCoin turned to the original chart’s source, Dr. Jean-Paul Rodrigue, who became famous for creating the “Phases of a Bubble” chart, a specific, investor-oriented variation of Gartner’s hype cycle.

Dr. Rodrigue, a professor at the Department of Global Studies and Geography at Hofstra University in New York, became well known for his bubble model in 2008. His model and chart are often cited and used to predict bubbles in many investment types, including stock markets, bond markets, housing markets, and now, cryptocurrencies.

Defining market terms like the “Bull trap,” the chart explores the lifestyle of all types of investment bubbles, concluding that technology moving through it is all in one of four distinct stages; Stealth, Awareness, Mania, and Blow-off. Strong arguments could be made for bitcoin being in at least three of these phases today.

In the first phase, Stealth, only investors “who understand the new fundamentals realize an emerging opportunity for substantial future appreciation get involved in the asset,” Dr. Rodrigue explained. “Prices gradually increase, but often completely unnoticed by the general population.”

Few would suggest that Bitcoin has not even seen the first stage of a bubble yet. Early adopters began investing in the digital currency via mining equipment the year it was created, and then directly into bitcoins themselves the following year, 2010. For the first four years of its existence, the vast majority of the world had not even heard of bitcoin, and to this day, less than one in ten thousand people has even one bitcoin address.

Read more: https://bravenewcoin.com/news/the-bitcoin-bubble-pinpointing-where-bitcoin-is-among-the-four-phases/