I too come to the conclusion that bitcoin is not a bursting bubble, as its gradual movement toward a general international community acceptance is more of a possibility, I fundamentally believe its scenarios of high volatility will create a large uncertainty within the market place and will then subsequently look to move to further AML and KYC compliances for further regulation.
Topic: Five Reasons Why Bitcoin Is Not a Bubble (Read 421 times)
people always seem to forget #5
but the fact is demand going up on a limited supply can mean only one thing
of course if demand were to falter there would be a an issue but who sees demand decreasing anytime soon
i sure dont
but the fact is demand going up on a limited supply can mean only one thing
of course if demand were to falter there would be a an issue but who sees demand decreasing anytime soon
i sure dont
Excellent recommendations that will suit beginners in bitcoin-sphere. I myself would very much need this information half a year ago, when I just started investing in bitcoin, in order to dispel all doubts.
I'm not sure I'd say that Bitcoin has gone mainstream.
It seems to me that it will be mainstream when I can buy groceries and gas with BTC. i.e. Merchant adoption as you had listed above.
Oh, and pay utility bills with BTC.
Once I can pay for those, I figure that will be where I'd call Bitcoin "mainstream".
It seems to me that it will be mainstream when I can buy groceries and gas with BTC. i.e. Merchant adoption as you had listed above.
Oh, and pay utility bills with BTC.
Once I can pay for those, I figure that will be where I'd call Bitcoin "mainstream".
I agree with your general sentiment, but there's two points that in my opinion don't apply:
I honestly don't think merchant adoption has been increasing all that much since 2013. And what's worse, I honestly doubt that the amount of Bitcoin being used to purchase goods and services has significantly risen. I'd love to be corrected, but until I see actual numbers I remain highly skeptical -- even with Japan's move towards Bitcoin.
Bitcoin's supply is part of what gives it value, that's correct. But limited supply still doesn't prevent something from being a bubble. Heck, even Gold was close to a bubble just a few years ago.
During the dot-com bubble Google was far from a monopoly. They weren't even publicly traded yet. Google survived the dot-com bubble because they did what they could do best and focused on their core value proposition -- that is, being a really good search engine.
Google became a monopoly because they weren't in a bubble -- that is, they were simply worth it -- not the other way round.
2. Increasing Merchant Adoption
I honestly don't think merchant adoption has been increasing all that much since 2013. And what's worse, I honestly doubt that the amount of Bitcoin being used to purchase goods and services has significantly risen. I'd love to be corrected, but until I see actual numbers I remain highly skeptical -- even with Japan's move towards Bitcoin.
5. Bitcoin’s Supply Is Limited
Bitcoin's supply is part of what gives it value, that's correct. But limited supply still doesn't prevent something from being a bubble. Heck, even Gold was close to a bubble just a few years ago.
Google isn't a bubble because it is a monopoly in its field. Bitcoin does things much worse. Bitcoin is not involved in the production and kernel developers throw up their hands. They thought that the credibility of bitcoin are endless. This is not so. On the cryptocurrency market there is so much competition and if bitcoin is not modernizarea to participate in the trade, it can replace the other.
During the dot-com bubble Google was far from a monopoly. They weren't even publicly traded yet. Google survived the dot-com bubble because they did what they could do best and focused on their core value proposition -- that is, being a really good search engine.
Google became a monopoly because they weren't in a bubble -- that is, they were simply worth it -- not the other way round.
I've ben so frustrated with this Twitter chart comparing BTC to tulip mania. I made a comparison of Bitcoin's price to some hit tech companies... feel free to use against dumb anti-Bitcoin arguments 
https://twitter.com/mblinder/status/928906812925001728
https://twitter.com/mblinder/status/928906812925001728
Yes, I definitely agree with you. Bitcoin has own value and advantages. You can see, many corporations in the world have accepted Bitcoin.
If this is a bubble, it could have ended like the scam investments or the hyip's that is developed to cheat investors. Next thing it could have never sustained such a long time period of growth. This could have never gained such a large universal adoption as now. Bubbles show growth, but cannot sustain, with bitcoin the fluctuations happen and growth continues.
I also believe that bitcoin is not a bubble, as its gradual progress towards widespread acceptance is undoubted, however these dramatic scenarios of high volatility will always be a handicap against its massive adoption and will continue to generate doubts and uncertainty regarding its viability as a reliable currency.
Google isn't a bubble because it is a monopoly in its field. Bitcoin does things much worse. Bitcoin is not involved in the production and kernel developers throw up their hands. They thought that the credibility of bitcoin are endless. This is not so. On the cryptocurrency market there is so much competition and if bitcoin is not modernizarea to participate in the trade, it can replace the other.
Bitcoin has [...] a much more promising growth trajectory.
The Internet stocks had a very good "growth trajectory" as well - the "trajectory" that they would just keep going up and up forever due to the fact that they were going up and up before. The point about fundamentals may be relevant because BTC's merit as a store of value in itself may be relevant, but this certainly does not remove the possibility of BTC's value having become too high or too rabidly speculative.
2. Increasing Merchant Adoption
Increasing? There's very little evidence of that in the last six months, if any. 
I agree that the third point is the biggest motivator as distressing economies usually have a lot of poor population but it is this kind of population who will move bitcoin to even more adoption than it is now. Adoption is everything until bitcoin becomes mainstream, once mainstream it will be unstoppable and it will be a true life changer in those distressing economies because the price will be huge at that time.
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.
And even in the Internet bubble, the best companies did not fail. Google, Amazon, Yahoo, and many others still exist and are thriving.Bitcoin is the Google of the internet bubble. Ethereum is the Amazon.
1. The Growing Acceptance of Bitcoin as Legal Tender
Countries declaring their support for Bitcoin's use as legal tender does not mean anyone will use it as legal tender. The reality is there has not be growth of using Bitcoin as a currency.2. Increasing Merchant Adoption
Strong arguments that merchants should or could accept Bitcoin don't mean they actually are accepting Bitcoin. The reality is that merchant adoption is not increasing at all.3. Bitcoin Is Increasingly Acting as a Store of Wealth in Distressed Economies
This is the biggest driver of future valuation growth.4. Bitcoin Has Only Just Gone Mainstream
Very valid to supporting valuation.5. Bitcoin’s Supply Is Limited
Very valid to supporting valuation
Five Reasons Why Bitcoin Is Not a Bubble
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.
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc
http://www.nasdaq.com/article/five-reasons-why-bitcoin-is-not-a-bubble-cm864891.
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.
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc
http://www.nasdaq.com/article/five-reasons-why-bitcoin-is-not-a-bubble-cm864891.
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