Bitcoin may be a bubble - so what?
It's only a 'so what' if you think you can sell fast enough when the bubble bursts.
Topic: 5 Reasons Bitcoin Is Not A Bubble - page 4. (Read 1024 times)
It's only a 'so what' if you think you can sell fast enough when the bubble bursts.
It depends on your definition of bubble.
If you think about it in a simplistic way that anything with a rapidly appreciating price and lots of volatility is a bubble - then yes - it is a bubble.
But once money was invented lots of things have gone through bubble phases. Gold, houses, stocks. In fact - there isn't really any asset class that isn't in a bubble - and its due to scarcity. Everyone wishes to buy the asset that gives them unlimited return - so any asset that does quickly gets bought up until people are paying more than the return they can ever realistically get back from it.. I think that's where a bubble starts - and by that definition most property in cities is a bubble.
Bitcoin may be a bubble - so what?
If you think about it in a simplistic way that anything with a rapidly appreciating price and lots of volatility is a bubble - then yes - it is a bubble.
But once money was invented lots of things have gone through bubble phases. Gold, houses, stocks. In fact - there isn't really any asset class that isn't in a bubble - and its due to scarcity. Everyone wishes to buy the asset that gives them unlimited return - so any asset that does quickly gets bought up until people are paying more than the return they can ever realistically get back from it.. I think that's where a bubble starts - and by that definition most property in cities is a bubble.
Bitcoin may be a bubble - so what?
Bitcoin is a bubble, it doesnt matter if you or all those websites says that it is not, because in fact, it is, because a lot of people are only hyping it to get profit, and we all are doing the same.
It has been increasing a lot in the last months, from $700 to $6200 ATH in just 10 months, isn't it a signal of a true bubble? It can be compared with the economic chaos of the US on 2008, only that this is digital.
In the moment that everybody decides to sell bitcoin, then the price will collapse, of course.
It has been increasing a lot in the last months, from $700 to $6200 ATH in just 10 months, isn't it a signal of a true bubble? It can be compared with the economic chaos of the US on 2008, only that this is digital.
In the moment that everybody decides to sell bitcoin, then the price will collapse, of course.
in general it's more like bubble and i admit it because the price is very high while not 'really' much people using it,
what i mean is,when we're looking at Gold(for example,i do not compare it one another.it's just an example),
it's a well known item and used in every country and every place,
no matter where you go you can find it and buy it unlike Bitcoin,
it's look like that because people hyping it too much and talking about replacing fiat and other stuff,
in other people,it's like a bubble because it can burst any time soon.
only a few people understand how it works and the majority will not understand it because they do not like a complicated thing.
so it's bubble or not it's all depend on the viewer themself.
what i mean is,when we're looking at Gold(for example,i do not compare it one another.it's just an example),
it's a well known item and used in every country and every place,
no matter where you go you can find it and buy it unlike Bitcoin,
it's look like that because people hyping it too much and talking about replacing fiat and other stuff,
in other people,it's like a bubble because it can burst any time soon.
only a few people understand how it works and the majority will not understand it because they do not like a complicated thing.
so it's bubble or not it's all depend on the viewer themself.
Quote
The digital currency bitcoin rallied by over 300 percent since the start of the year and has recently surpassed the $4,000 mark. Unsurprisingly, many financial markets pundits consider such a sharp rally the creation of an asset bubble.
In all fairness, the returns that bitcoin and its digital peers in the crypto assets space are experiencing have not been seen since the day and age of the internet bubble in the late 1990s. However, Bitcoin has very different fundamentals than early internet stocks and a much more promising growth trajectory.
* * *
As CoinTelegraph notes, countering no shortage of criticism from traditional financial circles that Bitcoin’s price had grown too quickly and would inevitably crash, the new-found faith in Bitcoin and its maturing as a medium of exchange has become apparent in its increasing resilience to ‘FUD’ or other bad news.
Mainstream forecasters now predict further upward momentum for prices, with TradingView eyeing a new all-time high of $6,800 for November despite the uncertainty surrounding the SegWit2x hard fork.
In all fairness, the returns that bitcoin and its digital peers in the crypto assets space are experiencing have not been seen since the day and age of the internet bubble in the late 1990s. However, Bitcoin has very different fundamentals than early internet stocks and a much more promising growth trajectory.
Quote
1. The Growing Acceptance of Bitcoin as Legal Tender
One of Bitcoin’s biggest challenges so far has been acceptance by lawmakers and financial regulators due to its decentralized nature and its unfortunate association with criminal activities carried out on the dark web. However, Bitcoin’s “official” acceptance is on the rise.
In April 2017, Japan announced that it would officially begin accepting Bitcoin as a legal payment method, which immediately boosted the price of bitcoin and has led to a substantial increase in merchant adoption across Japan.
In the Philippines, citizens have been increasingly using Bitcoin to send and receive low-cost remittances. This has not gone unnoticed by the country’s central bank, which announced in February 2017 that it will regulate Bitcoin so that the digital currency can be used as an officially accepted remittance system and, thereby, granting it full legal status.
Countries such as Australia and Russia have recently made similar statements that could lead to Bitcoin becoming a fully accepted medium of exchange in their respective countries. This is a trend that is likely to continue, given the growing demand for Bitcoin as an investment as well as an online payment system.
2. Increasing Merchant Adoption
In the early years of Bitcoin, merchant adoption was limited to a few brave ecommerce stores, usually run by early-stage Bitcoin enthusiasts. This, however, has changed substantially as leading tech companies and ecommerce platforms have chosen to accept Bitcoin as a payment method. Microsoft, Rakuten and Overstock are three of the largest companies to accept Bitcoin payments.
With bitcoin’s sharp price rally, increased media coverage and newfound acceptance in places such as Japan, Bitcoin merchant adoption is on the rise and this trend will likely continue.
The arguments for online merchants to accept Bitcoin are actually very strong; fees are lower than for credit card payments, chargeback fraud is entirely eliminated, new customers can be reached in underbanked regions and a new, tech-savvy consumer base can be attracted.
The more that merchant adoption increases globally, the more there will be regular and stable demand for the digital currency. And given the current low rate of merchant adoption, there is a substantial room for upside.
3. Bitcoin Is Increasingly Acting as a Store of Wealth in Distressed Economies
Another reason why Bitcoin is most likely not a bubble is that is has a much-need real world application in economically distressed countries. In places such as Venezuela, Bolivia and Zimbabwe, for example, bitcoin has been acting as a store of wealth and as an alternative spending currency as local currencies are weakening into worthlessness. This can be witnessed by increasing bitcoin trading volumes that are negatively correlated with the performance of local currencies and economic growth in distressed regions.
Bitcoin also allows individuals and businesses in countries with strict capital controls, such as Venezuela, to receive much-needed remittances to stay financially afloat. In other words, wherever there is economic distress, Bitcoin demand will likely rise and Bitcoin adoption will grow.
4. Bitcoin Has Only Just Gone Mainstream
You could say that 2017 has been the year in which Bitcoin has finally gone mainstream. Five years ago, if you would have asked the average person on the street what Bitcoin is, they would have most likely given you a bewildered look. Today, most people have at least heard of Bitcoin and many even know that one bitcoin is worth more than an ounce of gold.
Now that Bitcoin has become mainstream, the buying potential from new investors is immense, especially as institutional investors have started to open up to the idea of investing in bitcoin and other digital currencies.
5. Bitcoin’s Supply Is Limited
Finally, one of the key reason why Bitcoin has become so valuable is that its increasing demand is met with a fixed limited supply.
Because of the way Bitcoin was created, only 21 million coins can ever be mined. Furthermore, the rate at which new coins are created slows down over time, which means the increasing demand for the digital currency is not only met with a limited total supply but also with a continuously slowing supply.
The discussion of whether Bitcoin is a bubble or not will likely continue indefinitely, but the comparison between Bitcoin and early internet stocks does not hold true due to the fundamental differences between the two asset classes.
One of Bitcoin’s biggest challenges so far has been acceptance by lawmakers and financial regulators due to its decentralized nature and its unfortunate association with criminal activities carried out on the dark web. However, Bitcoin’s “official” acceptance is on the rise.
In April 2017, Japan announced that it would officially begin accepting Bitcoin as a legal payment method, which immediately boosted the price of bitcoin and has led to a substantial increase in merchant adoption across Japan.
In the Philippines, citizens have been increasingly using Bitcoin to send and receive low-cost remittances. This has not gone unnoticed by the country’s central bank, which announced in February 2017 that it will regulate Bitcoin so that the digital currency can be used as an officially accepted remittance system and, thereby, granting it full legal status.
Countries such as Australia and Russia have recently made similar statements that could lead to Bitcoin becoming a fully accepted medium of exchange in their respective countries. This is a trend that is likely to continue, given the growing demand for Bitcoin as an investment as well as an online payment system.
2. Increasing Merchant Adoption
In the early years of Bitcoin, merchant adoption was limited to a few brave ecommerce stores, usually run by early-stage Bitcoin enthusiasts. This, however, has changed substantially as leading tech companies and ecommerce platforms have chosen to accept Bitcoin as a payment method. Microsoft, Rakuten and Overstock are three of the largest companies to accept Bitcoin payments.
With bitcoin’s sharp price rally, increased media coverage and newfound acceptance in places such as Japan, Bitcoin merchant adoption is on the rise and this trend will likely continue.
The arguments for online merchants to accept Bitcoin are actually very strong; fees are lower than for credit card payments, chargeback fraud is entirely eliminated, new customers can be reached in underbanked regions and a new, tech-savvy consumer base can be attracted.
The more that merchant adoption increases globally, the more there will be regular and stable demand for the digital currency. And given the current low rate of merchant adoption, there is a substantial room for upside.
3. Bitcoin Is Increasingly Acting as a Store of Wealth in Distressed Economies
Another reason why Bitcoin is most likely not a bubble is that is has a much-need real world application in economically distressed countries. In places such as Venezuela, Bolivia and Zimbabwe, for example, bitcoin has been acting as a store of wealth and as an alternative spending currency as local currencies are weakening into worthlessness. This can be witnessed by increasing bitcoin trading volumes that are negatively correlated with the performance of local currencies and economic growth in distressed regions.
Bitcoin also allows individuals and businesses in countries with strict capital controls, such as Venezuela, to receive much-needed remittances to stay financially afloat. In other words, wherever there is economic distress, Bitcoin demand will likely rise and Bitcoin adoption will grow.
4. Bitcoin Has Only Just Gone Mainstream
You could say that 2017 has been the year in which Bitcoin has finally gone mainstream. Five years ago, if you would have asked the average person on the street what Bitcoin is, they would have most likely given you a bewildered look. Today, most people have at least heard of Bitcoin and many even know that one bitcoin is worth more than an ounce of gold.
Now that Bitcoin has become mainstream, the buying potential from new investors is immense, especially as institutional investors have started to open up to the idea of investing in bitcoin and other digital currencies.
5. Bitcoin’s Supply Is Limited
Finally, one of the key reason why Bitcoin has become so valuable is that its increasing demand is met with a fixed limited supply.
Because of the way Bitcoin was created, only 21 million coins can ever be mined. Furthermore, the rate at which new coins are created slows down over time, which means the increasing demand for the digital currency is not only met with a limited total supply but also with a continuously slowing supply.
The discussion of whether Bitcoin is a bubble or not will likely continue indefinitely, but the comparison between Bitcoin and early internet stocks does not hold true due to the fundamental differences between the two asset classes.
* * *
As CoinTelegraph notes, countering no shortage of criticism from traditional financial circles that Bitcoin’s price had grown too quickly and would inevitably crash, the new-found faith in Bitcoin and its maturing as a medium of exchange has become apparent in its increasing resilience to ‘FUD’ or other bad news.
Mainstream forecasters now predict further upward momentum for prices, with TradingView eyeing a new all-time high of $6,800 for November despite the uncertainty surrounding the SegWit2x hard fork.
http://www.zerohedge.com/news/2017-10-26/bitcoin-spikes-back-6000-five-reasons-why-its-not-bubble
...
This is a good flipside to the "bitcoin is a bubble" stories the media has spammed us with since forever.
Another good case for bitcoin not being a bubble due to its high projected future growth can be found in this thread here:
https://bitcointalksearch.org/topic/m.23152743
I think the article above addresses some of the points economists and finance analysts have glossed over. Bitcoin's growth in relation to its fundamental metrics are what will likely determine whether bitcoin is a bubble. Thus far none of the experts have addressed that topic. There's zero acknowledgement made of bitcoin's adoption in countries like japan, the philippines, russia or australia and crypto's transition towards becoming more mainstream. No commentary on whether those effects on bitcoin's elevated price could be sustainable.
It is possible that we will never see anything resembling legitimate analysis of bitcoin from the media. They have a long history of sweeping relevent and key points under the nearest rug. Out of sight, out of mind. Over the long term this could create opportunities for independent media to rise if indeed nature abhors a vacuum.
Is bitcoin a bubble? What are everyones thoughts on this?
Jump to: