Topic: A bubble is when price is not justified (Read 485 times)

But then what happened? All of those companies that were just like the icos we had in 2017 disappeared and while good projects like Google and Amazon suffered for a time the truth is that they later recovered and became as dominant as they are today.

So I will maintain what I said, a new technology may give the impression of being a bubble but it is not, sooner or later the price will recover and will reach new heights which is what happened to those companies and it happened to bitcoin as well.

"$BTC is a speculative bubble that poses more risk than opportunity although many of its proponents are right about their argument as to why it is historically relevant. If you don't know how much leverage is in the run-up, you probably don't know enough to own it," said Michael Burry. ,but whatever it is we still believe bitcoin will continue and we can use it for long term investment and I react to it this happened because of several issues that made it so

Those sentiments would surely changed up when bitcoins price tends to crash into the floor and you would see lots of threads that bitcoin is a bubble and same goes on what happened wayback where 2018 crash did happen.

It isnt surprising for people to changed up minds and perceptions basing off into those things that they are current experiencing.For now the market is still in good shape despite on having a some correction but still its price do held on.

Bubble is something price isnt justified but we know the potential of some coins into this market thats why we can determine neither a bubbled price or not because everything will really be varying with the demand.

Bitcoin or any cryptocurrencies becomes a bubble if the price goes up abruptly or you may say, suddenly without any solid justification for the rise. Often we have seen that the price goes up and then gradually crashes based on a particular Tweet or any other FUDs. The price rise based on these can be considered as a bubble because it goes up to come down. But in this process, few investors hold on to their cryptos which makes them more stable and preventing the fall to some extent or the price.

Then the statement that tells bitcoin is a bubble means it will only be considered as one if you percieve it like that. If you see bitcoin as an asset that can help you gain profit, regardless of the volatility of it, you are then considering it as something that is not a bubble. They say it only becomes a bubble once the price is justified, as mentioned by the OP, it is hard to determine if one is a bubble, you can only tell it as time passes by and as you buy it. In bitcoin's case I do not see it as bubble, I see it as a valuable wealth I need to obtain to secure my future.

According to the book "A Random Walk Through Wall Street" it also has a lot to do with the way advertising is advertised, on the stock market there was a great wave of projects, in which one promised that through the internet they could perceive the smell, many rushed to buy these types of shares, because many of the brokers called on investors to buy, who did not know the shares very well but that would go up, and that way they were selling and the bubble was inflated, then it What happened and exploited those investors was left empty-handed and those responsible had left, many times we cannot be guided by what the influencers say.

In the case of cryptocurrencies there are many bubbles, cases of projects that become scams, that is why you must be very careful when investing, many factors must be studied, however, BTC has been called a bubble, but not , does not meet the minimum requirements.

I agree with the bubble concept you said.  There will never be a single ratio that can measure the value of a stock, crypto or any other asset.  Because the birth of the fundamental ratio is also based on mitigating losses on investments based on whatever they can compare.  Our bubble indicator, the majority of the market makes purchases based on unfounded perceptions and is only influenced by lust for high returns later.  In fact, with the majority of the market rushing in making decisions without doing many comparisons for consideration, it will create huge losses in the future.  Bubbles will break easily with just one sentiment.  Such is the current state of affairs in the crypto market.  China's sentiment towards BTC, brought down the price by 50%.

Indeed. The absolute level have nothing to do with whether something is a bubble or not - and it is a common misconception that people think just because the stock market has been going up consistently over the last 40 years that it must be a bubble.

Sure, indices are at all time highs but along with it are fundamentals are earnings figures.

The same thing can be applied to BTC, even though DCF is obviously not applicable due to the lack of cash flows here. The level of adoption and institutional interest can be a gauge in BTC's fundamental valuation, and it's certainly in line with price action right now.

Bitcoin is a bubble but maybe I don't think it's true,Bitcoin is now the most valuable digital asset to invest in today and its growth seems to be huge,with a profit margin extremely large. Therefore, it is impossible to consider Bitcoin as a bubble.

Let's not confuse the technology of a decentralized currency itself, and one of its embodiments in the form of bitcoin. What Yahoo represented at one time represented the breakthrough technologies that are now used by modern Internet giants, but this did not completely cancel out the fact that at the beginning of the century there was an inflating of the bubble of technology companies and then there was a collapse in the dot-com crash, which led to the disappearance of some companies and a huge loss of capitalization for others. Therefore, it is not necessary to confuse the inflating of the bubble in some asset and the technologies themselves that are at the core.

It is simply lack of understanding, I have made the argument in the past that if you see the developments of technology that has changed the world then you will see that those technologies look like a bubble as well.

The difference strives that bubbles in assets that are not useful will in fact go back to zero and the bubble will disappear, but when it comes to something as useful as bitcoin then it does not matter if we see an occasional correction, the price will not only recover but reach new heights as people keep adopting it because of its usefulness.

Yeah, but how does that differ from tulip mania? It was also just a hype and pride, but turned into an enormous bubble. The biggest problem here is that there's no such thing as value, objectively speaking. It is always people that define the value of things. Sometimes the value rises very fast and people can't even realise themselves if they truly value the thing or do they just want it at the moment.

So I will like to know if the point you are portraying is that bubble doesn't have anything to do with price increment or just that when the price is high it is not justified but have it in mind I am asking in relation to bitcoin and not English wise.

While a bubble in crypto is not fair and puts at risk derivatives allow traders to speculate about future asset prices. Today many exchanges offer crypto trading having conversations with the core of the exchange helps you to win big in this business trading can be profitable if you have the right knowledge and risk management strategies to avoid external losses. Therefore you should and should take due diligence before trading your futures and understand both their advantages and risks understanding the risks of bubbles will make it easier to understand currency palm dumps.

First and foremost, we have to understand that a bubble can happen to any industry, not just involving cryptocurrency. Seems to me that most are inclined to connect the term bubble with cryptocurrency all maybe because just like an e-book the assets here are just existing electronically, and we have to admit that many platforms and projects are just really start-ups with many more years to prove their value or worth. Now, am just intrigue...what if I decide to buy something because I am expecting that its value will be doing some rise or maybe pumps in the future, am I doing a bubble or not?

If you're in an auction place the scenario is really different and everything is a hype, because you have the pride and willing to do everything just to get the art that you want even if its not real value at all, aside from a well know artist. Bubble always happen on a hype project, we've seen many of this already in cryptomarket and if you are looking at some meme tokens now, you'll see that some of them already burst.

That's right, talking about the bubble in the bitcoin market, we can do this only when the destruction of the bubble has already occurred, although a moment before that there would be a large bunch of experts who would reasonably and quite convincingly prove that the price of $ 60,000 is justified and market-based. Similarly, now another bunch of experts will reasonably argue that this was a classic bubble and the collapse was imminent. You just have to accept that the market, like all economic science, is not based on the same firm principles as, for example, physics and other exact sciences and various experiments in economics can give completely opposite results. So it's really easier to talk about a bubble, because the bubble burst and it actually happened.

On one hand, I agree with you, a bubble is when someone buys something just because, out of hype, people create this valuable "air" and want to make money, expecting that others will act the same, but in reality, they wouldn't have bought that item for even 1/10th of the current price, for instance.

On the other hand, that gave a thought about art and public sales. Say There's a certain painting, not even by a world-renown artist, and the price is pumped by several orders of magnitude just within hours, people surely aren't thinking about the real value at that time, they just want the thing. Isn't that a little like a bubble?

I mean, a crash from 60,000 to 30,000 certainly suggests it was a bubble if it doesn't very quickly go back up to 60,000.  We're far past the point now where any recovery would have proven it wasn't a bubble.  We still can't get above 40,000, so there's nothing in the numbers that currently suggests it wasn't a bubble at 60,000.  Even if it eventually gets back there, the numbers still prove out the bubble argument more than not.

That makes sense. I think most of the times people think bitcoin is too costly because one bitcoin is worth $40k or $60k whatever the price is.
But they look at the fact that they can own 0.1 bitcoin for $4k or $6k respectively too. I have experienced this because of many of my friends joined the crypto community lately.
Many started buying altcoins and thought bitcoin is overvalued and too expensive to buy. I made them understand that they still have the option to buy in decimals and own their bitcoins.
Many people look at the quantity and the how potential the coin is.

bubbles happen when you start buying something just because you think someone will pay more for it? Isn't that pointing at gold and other valuable items or assets as well? Valuable things tend to grow higher in price as time goes on, the only thing that separate BTC from bubble is the high volatility part

Ahh, the use of "Moat" here, I am not sure if it really fits the context but I do imagine that in the world of economy you are directing it for pool of investments surrounded by the different asset values. Could be good comparison if we understand how economy, its cash in-flow/out-flow, valuing/devaluing works really. I would say it is fort of all the above things I mentioned and water surrounding to it is nothing but the investors, companies, businesses, government and what not which either converge the value of fort into smooth transition or bubble.
They are the one who creates the bubble and vice versa.

It is probably true that a bubble is when the price of an asset is too high. I think a great example of a bubble right now is the US dollar and its number of companies. To see this, you should turn your attention to the stock market and how much money the United States prints to support its companies. Hmm, but if the company's product is really in demand, then why print money for these companies? Yes, the answer is obvious, there is no demand, and the price is artificially supported. With cryptocurrencies, things are a little different. You can just be a holder of, for example, BTC, and thereby preserve its price and create demand in the market. But there are other problems for crypto, for example, price manipulation and the same pump for price growth. So the topic of bubbles will always be relevant and there is nothing we can do about it.

Bubble is ofcourse a different thing which is not the case with Bitcoin as if it was it would have been burst a long time ago.Bitcoin prices are not too much also because they are increasing with the rising demand in the market by investors and major corporations accepting btc payment system and they would not let any bubble currency to be listed with them onboard.The ponzi schemes and stocks or currencies are called bubble when they fail to deliver what they were made for and prices were too high even then also but this is not the case with Bitcoin as thousands of transaction are being settled on blockchain daily and it is still keeping up the pace.So for me it's a decentalized medium of payment or store of value not any bubble burst scam.

many people have the wrong perception about it, that bubble often occur when we think that it has no value but becomes very valuable. people dare to speculate because has a big hand in influencing the market

Why do people call it bubble when it recovers when it crashes and it didn't even pop in the first place, I think that calling bitcoin a bubble is a pretty stupid idea since bitcoin is still going strong, maybe when we see it crash to a negative, maybe that's when we will call it a bubble but I highly doubt that it will happen.

When the price of bitcoin at the low value.You should buy as much you can.Because the bubble will surely happened in the bitcoin market.So it will bring you some good profit.You should wait for the bubble.You should not sell at low price,for the demand of money.It will eaten your profit in a short period.

The only reason that many saying that bitcoin is a buble is because they are not able to control it because it is not centrelized like the other assests which investors are used to, but the reason that people invest in bitcoin is because of the new ideas and the solutions to the fiat currency that have been forced on us to use for years, and that idea is what makes bitcoin a long terms investment that you can trust and invest in it because it represents the future and anyone who thinks its a bubble does not have a valid reason behind it.

right, this is not a bubble, as it was before where btc fell to $3500, but we can see this year where btc is strong again. therefore many of the investors suddenly get rich, and there are also many new investors who lose a lot of capital at this time, because they don't have knowledge of crypto market behavior and just want to get money easily and quickly

What people think a bubble is and what the actual meaning is are different,  people think this way because of misconception of the whole btc price movement,  btc is seen by many as a high quality asset which is the reason why so much value is placed on it,
I certainly don't think btc is a bubble otherwise the price will not be able to recover after it crashes,  that has not been the case, anytime btc crashes it comes back even stronger.

We would continually see up these projects as these creators would really see the potential for them to make easy profits if they were just lucky that the community would be hooked up when
it comes or talks in interest that it do shows. Yes, we might see or continue to look at that this market will be flooded by alts but as the years goes by those who had experience will
eventually just be on automatic ignore into these shitty projects as we do already aware on whats the motive in the very first place which is to steal and scam out investors money
and ran away excluding to those legit though but the impression would really last up. Thing here that noobs will be likely or always the victim on here so always Dyor.

I do share the same and we might not see many coins that are in the market today, when i started there were other hyped coins and some of the died eventually and after the arrival of the token market we started seeing a lot more shit coins in the market as it became easy to start a project to raise money and then keep on shilling to pump the coin and eventually the developers will cash out and shut the project altogether. We have seen many like that in the past and we will see the same trend in the future.

 

During that bubble there were many stocks that never recovered but from it emerged the tech giants of today like Google and Amazon, and something similar is going to happen to the market of cryptocurrencies, from all the coins that exist today only a handful of them will remain during the next decade.

But those coins are going to become incredibly popular and most people around the world will use them similar to what happened to the Internet and related technologies back in the day to the point that understanding our lives without using bitcoin will be impossible at that point.

All assets based on scarcity are "in the bubble" because of price inflation, government print more and more money. The result is, everyone gets more money, but the assets supply isn't increasing.

Also, prices are based on perception so it's always "not justifiable" in the sense of everyone cannot value assets the same. The discrepancy in stocks, for example, aren't as wide as BTC because they have net income as the main expectation-reality binder.

Combine the (1) inflation and (2) expectation, you will get the mother of all bubbles.

Bitcoin is not a bubble. But the problem is that many of the altcoins suddenly went up by 50x or 100x, which made them very much overpriced. And as a result of this, the entire cryptocurrency market was being talked about as a bubble area. In the end, always it is the Bitcoin holders who suffer because of these shitcoins. But the trick here is to hold for the long term. It may take some time for Bitcoin to recover, but ultimately that will happen. However, there is no such guarantee with the altcoins. For example take the case of TRX. That particular shitcoin was never able to reach the level which it attained in 2017.

Well from your explanation, I wouldn’t even say that Bitcoin is a bubble. Bitcoin is a very good investment and if you look at it in several ways you’re going to see how good it is. Although that doesn’t mean that there are no ways that it has disadvantages, but it’s still worth it.

With that said, I know there will be people who wouldn’t believe that Bitcoin is not a bubble and that’s because they don’t have any clue on what Bitcoin is all about, and since they have understanding of it, they are just going to be making all kinds of assumptions that are totally wrong. But, with time Bitcoin to going to grow, and they are going to fully understand it.

the same is true with stocks. just because the big players who own the economy have defined ways of their own to calculate price of a stock that doesn't mean there is really a way to do it. stock price is also pure guess.
at least with bitcoin you see the utility and the scarcity then you look at the adoption and how many people can have how much bitcoin then you can come up with a good price.

You are right but if you are investing in a company or say stocks then you can inquire and evaluate but how do you evaluate whether the current price of bitcoin is underpriced or overpriced? It's impossible because you cannot imagine who holds how much and what is going on in others' minds. You cannot even evaluate the demand and supply because once again, you just don't know who will sell what amounts, and as far as demand goes, I don't think Bitcoin is in super need or something. I mean there is nothing you can exclusively buy with bitcoins, so demand can't be calculated either.

But I fully agree with you if someone can analyze and evaluate whether the current price is underrated or overrated then it's much easy to make money because you just buy the underrated shares and short sell the overpriced shares. This is how most of the stock market kings operate.

Bubble in simple words is when a big change happens, to most people. I don't think the price at $55k-60k was unjustified. There are more and more avenues to spend and trade bitcoins which only means that the number of people who use bitcoins are increasing.

I have never been able to understand this bubble and all, what I best know is to take advantage when everyone is panicking and sell them once everyone is overhyped about the prices and keep buying even when the price has reached its ATH. People kept buying dogecoins even when it reached some insane value like $0.8 or $0.7 and I was sure that this is just hype although I never tried to play with the market because there are giants manipulating the doge market and it was not worth it, but I was absolutely sure doge cannot sustain higher than $0.7 which I think was its ATH.

The question intrigues me. Each individual has primary needs and essentials. These are somethings you cannot trade for anything for you to be able to survive in this era.

So the question is why won't they sell all their assets if they believed the price is higher than what currently it is. The answer is very simple, people are not dumb enough to invest in one thing as they see it to have high value. Plus the different factors affecting BTC and the infamous "VOLALITY"

You can buy something because you believe it will be worth more in the future because it would be more useful. Like shares of a company that is small now but will become large in the future. Or with Bitcoin, it will be more adopted as a currency or store of value.

The problem with Bitcoin is that there's no good way to calculate how much it should be worth like you can with stocks, it's all just pure guess and the fact how much money can people actually pay for it. Some people say that Bitcoin will be worth $150,000 or $500,000 - but if they truly believe it, why won't they sell all their assets for it?

Bitcoin's bull case is logical as it has gone through its 3rd halving and has many multi-million dollar buy-in funds in the form of Microstrategy.
Bitcoin has been accumulating for a long time and exploded in value when the pandemic hit. Money flows into Bitcoin because they are withdrawn from other markets. Not only Bitcoin but a series of stocks of companies around the world have increased in price. A high price increase will have to reduce the price to regain balance so I think Bitcoin is not a bubble. Many people have concluded Bitcoin is a bubble in 2017 and now Bitcoin is above the $20k level of ATH Bitcoin in 2017.

Demand comes from people wanting to buy it as an investment; actual use-case remains scant compared to people just holding it. The demand as an investment comes from speculation that other people will consider it to be worth more in the future than you bought it for, which leads directly back in to my prior post that it's driven exclusively by speculation.

we can learn it from SHIB or DOGE which according to my assumption the increase is unreasonable, skyrocketed suddenly and made beginners also interested in speculating. maybe after seeing the current situation will be an experience for the future

Spot on. I remember going through the dot com bubble where a bunch of tech related investors lost everything, and that market didn't really recover. Bitcoin had unhealthy growth (I do hate to admit this tbh). It was nice while it lasted, but a bunch of naive investors treating it like a ponzi meant it had to crash at some point. Contrary to other bubbles, BTC will be back, I'm not worried.

People relating the bitcoin phenomenon to the tulip mania is wrong specifically because of this. They always see bitcoin's high price as a bubble not knowing why people are buying into it anyway. They tend to forget the use-case that bitcoin could potentially provide the current world and the future that it can pave for our grandkids. That is something that doesn't strike a thought on their brains which is why they would always continue to blabber about how bitcoin is useless and the bubble is going to pop anytime soon.

I agree with you, bubbles can happen even if the price is not so high. The thing with bubbles is that most people thing they can get out before the bubble burst. It is like with a pyramid scheme. Most people are aware that the prices are higher than the fundamentals make sense but still go for a trade. It is all about finding a buyer that is willing to pay more than we paid, and then the bubble burst all of a sudden. One problem for comparing prices to our own preferences is that it is not universal, people will be giving different prices for a diamond or a soccer ticket. Some people want to get the cheapest ticket and are willing to sit in the back rows, while others want to sit every game in the first row and are willing to pay 1000+ per season.

The ease of saying "bitcoin is in a bubble" comes from the fact that it doesn't really have a value or a cost and that is the reason. Sure miners have a cost but they create that cost, if every miner in the world stops right now and only you mine it with your laptop that will still be valid (albeit very inefficient) and you will get it all and make a killer profit. Sure the more the merrier for the efficiency of the project but that cost is still insanely lower than what it is right now and never really reflected on the price before, we had times when cost was higher than the price and we have times when price is higher than the cost.

The real cost of diamonds is known to be very little, or tulips are like a dollar at most, whereas when it comes down to spending 1000X more on them, people did it and still doing it and that is the real reason for calling it a bubble.

I tend to agree, bubble is somehow different and you can only consider an asset having a bubble if some undisclosed circumstances affected its value and mostly the bubbly is caused by the founders and the initiator's actions.

This won’t apply to Bitcoin. Not only because Bitcoin is a decentralized one, everything in Bitcoin is transparent enough not to be suspected of bubble.

The correction is justified, China just banned all the financial institutions to serve cryptocurrency-related services, not just that, miners are forced to move their mining rigs somewhere offshore, then we all know that these could affect the price generally.

People who fears of Bitcoin having a bubble are the people who should know more about Bitcoin.  We all agreed and knew the pros and cons of Bitcoin as we enter and stay.  These circumstances don’t affect that, it’s not new to us anymore.

Isn't that determined by demand and supply? I mean, back in the early days of 2013-14, Bitcoin wasn't that popular, thus, its demand was pretty restricted to a limited amount of skilled individuals. (Metaphorically speaking when mentioning individuals, I'm implying that the demand was pretty limited compared to nowadays). More and more people are involved now, rendering Bitcoin and cryptocurrencies popular, while at the same time being suggested by multiple investors.

It's now seen as an investment asset, similar to gold, it's valuable because it's being bought and used, not only by individuals but also from large corporations, such as Tesla, or PayPal.

I don't think this is true. What makes bitcoin valuable to you is that other people think it's valuable. You wouldn't be paying $40,000 per coin if everyone else thought it was paying $10,000 just because it's "unique, better and safer Network/System." Your perception of what bitcoin is worth and whether it's overvalued or undervalued is inextricably linked to what other people think of it. If that wasn't the case, you would have never stopped buying when it was sub $1000. The problem was you didn't know what it was worth then, because nobody else did either. And nothing has changed there. Nobody still knows what it's worth because it's all just speculation, and the speculation is about what other people are going to think about it in the future that's going to determine its value.

An inability to value it and just investing based on speculation are why it's a bad investment choice for me.

The lack of financial education really hurts people in scenarios like this one, bitcoin is not a bubble but bitcoin like any other asset can be subject to form bubbles from time to time, for most people there is no difference between those two statements but for us that is all the difference in the world.


Bitcoin has been the best performing asset since it was created, you cannot maintain that kind of performance if it was simply a bubble, bitcoin is very volatile but that has to do with its small size compared to other financial assets and due to its inelastic supply, this creates bubbles from time to time but nothing that anyone that is willing to be invested in bitcoin for the long term should be worried about.

Well I do believe that people think there bubble is basically when the price keeps going higher and higher and suddenly the price comes down drastically.
Which has happened to the market a lot of times but I do believe that this is not only essential but its also character of a Crypto, which essentially distinguishes it from fiat and other currencies. I do think that this is a term which was coined by people who have their balances only in banks and other Investments.
- For me if the price is low 🔅 you just need to buy and wait for the perfect opportunity to sell.
This is how the bubble works, it's essential for the whole market and it is through this that we see the redistribution of wealth.

Those who believe that Bitcoin is a Ponzi scheme don't cease to amaze me. Bitcoin has proven its worth, throughout the years, earnings are solely based on your decisions, it's a decentralized asset that has gained value, similarly with gold. No one has actually promised a guaranteed profit with cryptocurrency.

I don't believe that it's a bubble either, however, I do believe that its price skyrocketed sharply, within a short time period.

I think those two things are inseparable--a tulip bulb was definitely worth some price back in the 1600s, but the increase in price had gotten so out of control that people eventually realized how irrational the market for tulips had gotten.  And if you look at price charts of things that have been in a bubble, you'll see the same thing: exponential growth for a period of time followed by an enormous crash and a long period of stagnant prices.

I don't see bitcoin as being in a bubble right now.  There were "mini bubbles" in 2014 and 2017, but the recovery periods have been extremely short, and I wouldn't expect that in a true bubble.  Look at the price of gold and silver leading up to 2011, when they crashed.  It took 10 years just for their prices to get back to where they are now, which is still below their peak in 2011.  The NASDAQ composite took even more than that to recover from the crash of 2000--and the list goes on.

I think most members here realize bitcoin isn't a Ponzi or a scam.  That was my initial impression of it back when I didn't know what it was, but nowadays I think even the average investors sees it as just another asset class (cryptocurrency), especially given how much mainstream media coverage it gets.

If we talk about bubble, then this is inseparable from Bitcoin and other alternative coins. All the economists who do not accept crypto think that this is only gambling because the risk of the bubble is very high and it does not have any underlying assets. I agree with you but it cannot be denied that crypto is an asset with a very high risk, people can create trends easily and destroy them in one word. This is what is happening now if we see EM behavior as whales openly. He announced that he had bought 1.5B USD on BTC so the market took it seriously and followed his lead until BTC almost touched the price of 1 B IDR, my country's exchange rate. After the bubble occurred, he sold it and slammed the price. This can be said to be an example of a real bubble recently.

Some people think bitcoin is a bubble, for me it's not.

They just don't understand that what makes bitcoin unique from another type of investment is because bitcoin is decentralized and with a fixed supply.
Hence, the price is very volatile, and we know the reason behind, it's the manipulation by the whales but it will not make bitcoin worthless even if it will dump in the long run as we know bitcoin will recover as well.

Bitcoin is not similar to a Ponzi scheme, it's an investment that does not promise anything.

What makes Bitcoin valuable to me is because it's unique, better and safer Network/System. It's also a unique system for true financial freedom. So, such system should be worth alot until we have a safe replacement that sufficiently improves on (but does not violate) the Bitcoin standards/features.
I haven't seen any yet as far as I can tell.
Besides, principled founders is also one reason I stick with bitcoin...they are not perfect though, but I havent seen great replacement yet in Crypto space full of wolves.

We need to moderate the volatility though... without compromising on the deflationary feature.

A bubble is not about how high is the price of something (tulip bulbs, diamonds, dot-com stocks...), it is when the price is not justified. It is a bit for everyone to decide if the price of an asset is justified really, there is not a magic formula that will tell you if it is. In stocks or investments you can make a "discounted cash-flow" apply a rate of return and make some hypothesis about economy, growth and "moat" and at least you will get a number from it. On other assets, the price will be fixed by supply and demand (and that is the case for bitcoin) since they do not produce a regular cash flow.

When it comes to decide if there is a bubble, you have to think about how much is worth to you. How much would you pay to get, e.g. a 4% in dividend instead of spending the money today in a car or a TV? How much would you pay for a diamond or even a soccer ticket? (my personal for those two is quite low)? Or, How much would you pay for 1 in 21 million bitcoins?

Getting to the point, bubbles happen when you start buying something just because you think someone will pay more for it, instead of looking at how useful is it for you or for a community of people. Buying something is actually telling the market that they are wrong, and what you are buying is worth more than what the consensus means. This is being contrarian, anything else is speculating and creating bubbles.