is it a bubble?

[sister1001]

many people say that bitcoin bubble, honestly I still do not understand what is meant by the term bubble earlier?

until now I am still curious

A bubble is an asset whose price rises faster than the value proposition should dictate. Since bitcoin is an asset with no inherent value, the value ostensibly comes from one of two places: 1) utility to perform a useful function (value transfer or store of value) or 2) speculation that someone in the future will be willing to buy the asset off of you for more than what you paid for (the later idiot fallacy). Bitcoin was supposedly created to fulfill number 1, value transfer/store of value, but it is much MUCH more widely used for number 2, which makes it prone to inflated price due to hype, FOMO and the collective delusion that the price cannot go down for [insert any number of unsound reasons].

Because there is no reliable mechanism for shorting bitcoin (an equilibrium force in the market), price is pressure primarily builds in one direction without a reliable counter force (someone betting against the price by shorting), and this further tends to skew assets like this into bubble territory. The bubble pops much more violently in these cases than assets that can be shorted easily because the buying pressure suddenly disappears and then there is a rush to get out of the asset by dumping coins on a smaller pool of buyers.

Quite decent explanation. I also believe that bitcoin has an additional value for it´s original intended use, that is, a peer to peer payment method via a decentralised coin.

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[Anteros]

many people say that bitcoin bubble, honestly I still do not understand what is meant by the term bubble earlier?

until now I am still curious

This means that while there are new people ready to invest in bitcoin, he will live. But as soon as these people do not become it will collapse.

[bitctrimor1]

many people say that bitcoin bubble, honestly I still do not understand what is meant by the term bubble earlier?

until now I am still curious

When you say an asset is a "bubble", it means that it would not prosper or last for a long time. It may gain its peak quickly, but after a while it would be doomed and plummet in value similar to how a bubble may abruptly float and then pop. I think that description is not applicable to bitcoin because it has been present for a while now, for about a decade to be exact. And although its value is going up and down at a very quickly, I think its just one of its features because its not backed by any reserves like the traditional currencies, which pumps value on it readily to avoid the effect of inflation.

[mikeey89]

many people say that bitcoin bubble, honestly I still do not understand what is meant by the term bubble earlier?

until now I am still curious

When you say an asset is a "bubble", it means that it would not prosper or last for a long time. It may gain its peak quickly, but after a while it would be doomed and plummet in value similar to how a bubble may abruptly float and then pop. I think that description is not applicable to bitcoin because it has been present for a while now, for about a decade to be exact. And although its value is going up and down at a very quickly, I think its just one of its features because its not backed by any reserves like the traditional currencies, which pumps value on it readily to avoid the effect of inflation.

This is very spot on! Until now cryptocurrencies has not had many use cases, but in 2018 a lot of applications are being released and I think it will be the best year of cryptocurrencies ever so far.

[jaysabi]

Citing a well-worn comparison to the so-called “tulip bubble,” Shiller said that bitcoin has no value outside of the “common consensus that it has value,” which makes it different from gold and other commodities.

This is a funny comparison, as gold is one of the rare assets that also only have value because of the common consensus that it has value.  Gold is economically essentially almost useless.  It is only valued, because of the common consensus that it has value. 

As to the OP: yes, of course it is a bubble, and yes of course it burst.  Like in 2011, and in 2013.  And like the stock market in 1929.  And like the housing prices in 2007.  And like the dot-com bubble in the 90-ies.  Of course.  It is made to bubble.  That's what speculative finance is all about.

Gold has inherent value in that it is used in industrial, medical, and other fields. Absent people's consensus that it is a store of value, it still has practical use which gives it a baseline value, which is not the case for Bitcoin. Bitcoin is purely speculative and has zero inherent value. Gold also has thousands of years of history as a valuable asset, so it is no longer the case that everyone just decides it has value. For centuries before you've been alive, gold has had value. Gold isn't speculative like bitcoin is in that you can be reasonably sure that gold will continue to have value in the future. The same is not true for an asset like bitcoin that has been around for only 10ish years.

I support this stance since this is what I mostly say myself

Though I have to add a small but important commentary here. Gold's inherent value mostly consists in its direct use as jewelry. I certainly understand that defending your position (and mine, for the record, since I share it with you here) by emphasizing the use of gold in industrial and medical fields is a lot easier but it is not required since you can't argue with the numbers. And the numbers are that the jewelry industry is responsible for over 50% of the global demand for gold, over 35% of gold is used for investment purposes (central bank gold reserves as well as the IMF stash and private investments), and only around 8% is used in electronics, with other fields sharing the leftover. On the other hand, Bitcoin has inherent value too, which is called transactional utility, but today, with its extortionate fees and infinitely long confirmations, it is minuscule and utterly irrelevant

Sure, jewelry is a large application of gold, but its use in jewelry is because of the value. It's a chicken/egg argument. Did gold have value because it is used in jewelry or was it used in jewelry because it had value? Like many precious/rare elements, it's use in jewelry came about as a function of its value as a means to display wealth. You see the same thing with diamonds, which are used in jewelry because the supply has been monopolized and artificially restricted to create a perception of value. Absent a consensus of value, they wouldn't be used in jewelry. Because jewelry's purpose is to display wealth, value is a prerequisite.

[deisik]

Citing a well-worn comparison to the so-called “tulip bubble,” Shiller said that bitcoin has no value outside of the “common consensus that it has value,” which makes it different from gold and other commodities.

This is a funny comparison, as gold is one of the rare assets that also only have value because of the common consensus that it has value.  Gold is economically essentially almost useless.  It is only valued, because of the common consensus that it has value. 

As to the OP: yes, of course it is a bubble, and yes of course it burst.  Like in 2011, and in 2013.  And like the stock market in 1929.  And like the housing prices in 2007.  And like the dot-com bubble in the 90-ies.  Of course.  It is made to bubble.  That's what speculative finance is all about.

Gold has inherent value in that it is used in industrial, medical, and other fields. Absent people's consensus that it is a store of value, it still has practical use which gives it a baseline value, which is not the case for Bitcoin. Bitcoin is purely speculative and has zero inherent value. Gold also has thousands of years of history as a valuable asset, so it is no longer the case that everyone just decides it has value. For centuries before you've been alive, gold has had value. Gold isn't speculative like bitcoin is in that you can be reasonably sure that gold will continue to have value in the future. The same is not true for an asset like bitcoin that has been around for only 10ish years.

I support this stance since this is what I mostly say myself

Though I have to add a small but important commentary here. Gold's inherent value mostly consists in its direct use as jewelry. I certainly understand that defending your position (and mine, for the record, since I share it with you here) by emphasizing the use of gold in industrial and medical fields is a lot easier but it is not required since you can't argue with the numbers. And the numbers are that the jewelry industry is responsible for over 50% of the global demand for gold, over 35% of gold is used for investment purposes (central bank gold reserves as well as the IMF stash and private investments), and only around 8% is used in electronics, with other fields sharing the leftover. On the other hand, Bitcoin has inherent value too, which is called transactional utility, but today, with its extortionate fees and infinitely long confirmations, it is minuscule and utterly irrelevant

Sure, jewelry is a large application of gold, but its use in jewelry is because of the value. It's a chicken/egg argument. Did gold have value because it is used in jewelry or was it used in jewelry because it had value? Like many precious/rare elements, it's use in jewelry came about as a function of its value as a means to display wealth. You see the same thing with diamonds, which are used in jewelry because the supply has been monopolized and artificially restricted to create a perception of value. Absent a consensus of value, they wouldn't be used in jewelry. Because jewelry's purpose is to display wealth, value is a prerequisite.

Personally, I don't think it is a chicken and egg argument or problem

And specifically with respect to gold. It is debatable with diamonds since diamonds are just pieces of glass to most people. But it is not so with gold. And I think that it can be said with certainty that gold is used in jewelry because of its value which stems directly from its qualities that are so immediately and unreservedly appealing to the vast majority of people, I mean its shine and luster, its nobility and indestructibility, whatever. There are many materials and precious metals which are way more expensive than gold but they are not used in jewelry since they lack the appeal of gold, which is both unique and universal

[greeklogos]

The same as it is impossible to every body like you, it is impossible to prove everybody that bitcoin is not a bubble. Both sides in this argue have their own proves with which it is hard to fight sometimes. But if you asking me about the current drop, no it's not a bubble. If it would be a bubble as we know it in economical sense, everything will happen in a moment.

[RAmondragon]

It's a metaphor for an asset that balloons so fast, increasing in size (price) and then suddenly bursts with nothing left (a crash). They can call it what they want but for me, it's not a bubble since the price increase is based on a global market with its own ecosystem. It's value is determined by the people and there is use for it.

[compak_comunity]

Maybe someone thinks of it as a bubble because the price of each altcoin has a fluctuated movement So that the market when it is able to become red and green from where one assumes that altcoin is not always increased continuously.

[John Wallker]

Many people think it's a bouble cuz there were many situations with such things like bitcoin is and now the credit of people believe is not big.

[Bitcoinjheta]

i think bitcoin is a bubble but i like bitcoin.

Well, many people have come to a point the bitcoin is a big bubble or shall we say that it's over the crypto currency. But for me it's not, just because of the value in a market having down fall. The volatility of bitcoin is a just a usual play because they have been base on the demand and supply in a market.

[Zach707]

No, it is not a bubble. There is just correction going on and everything will be alright soon. Those who say bitcoin is a bubble is a critics if bitcoin.

[onrise]

No, it is not a bubble. There is just correction going on and everything will be alright soon. Those who say bitcoin is a bubble is a critics if bitcoin.

Correction do come and it happens every year. So we do not need to panic and sell all the coins. Infact try to buy more coins at this discounted rates. And those who think it is a bubble so let them think and hope they do not invest in this market then because once it will rise then they would feel bad that why dint they invest now and they could have easily made multiple times returns in coming months from this crypto currency.

[Tonyloaves]

A bubble is when the price of something increases abnormally way past its speculative forecast and drops down abruptly to an extremely low price as a result. Bitcoin has been looked at by people as a bubble because of its vast increase in price over the year which is speculated to "pop" anytime soon. But with this being said, Bitcoin is proving that it is not a mere bubble given how it has stayed strong as a cryptocurrency over the years, its extremely volatile nature comes from the fact that it is decentralized and is unregulated.

[Sled]

It is not a bubble, the bitcoin and other cryptocurrencies are fast in growing and they are keep on saying that the cryptocurrencies like bitcoin is a bubble but in the reality, it is not, they are just volatile so it looks like that the market is a bubble because the price is changing faster than what the others speculate and that made them think that bitcoin is a bubble.

[Betwrong]

Something can be called a bubble if it is valued a lot but in fact has from little to no value in itself. Just yesterday I watched a mockumentary called The Great Contemporary Art Bubble where they stated (jokingly) that most of the modern art paintings are highly overvalued, but still the price is rising and the paintings  keep selling for millions USD. IMO Bitcoin has much more real value in itself than any of the paintings, especially in the future to come. I think that $20k for 1 BTC is still far from the highest limit Bitcoin can reach and even far from the reasonable price which it can get in the nearest future (which imo will be close to $100k).

[BitHodler]

I think that $20k for 1 BTC is still far from the highest limit Bitcoin can reach and even far from the reasonable price which it can get in the nearest future (which imo will be close to $100k).

The future potential of Bitcoin has always been there. Even at sub $1000 levels people were speculating about $100,000 and that's still the same. Short term things are a bit different, and we can't ignore the overbought market.

At that point it was all due to the future market as people were expecting it to be the next big thing in regards to being a price booster. And honestly speaking, potential entry of institutional investors is bullish.

Turns out, just the initial speculation was a major price booster, and everything happened afterwards was nothing more than the market readjusting itself to more appropriate levels. Either buy or keep hodling, and have patience.

[lesinset]

When people say it's a bubble, they mean that it's not real. People who does bitcoin knows that Bitcoin is not a bubble or a fraud. So, if you yourself have gained from bitcoin, you should know that it's for real.

[LeeMBlack]

It is a way of speculating about something that causes fears and fears within investors, who feel threatened by bitcoin, what they want is for people to think that, to convince us that if it is a bubble and we stop investing, for that They have caused all this collective withdrawal.

[Siopao]

Some people compare bitcoin with bubble, due to buble's characteristic of being blown up to its biggest form and there will come a time that it will just burst out. In relation with bitcoin that hit its highest value and noe experiencing its lowest price. But I don't think it will be gone just like a bubble.