Why Bitcoin is not a bubble!

[zhekinsp]

People who cannot understand the idea of introduction of decentralized payment system still saying it as bubble but the fact is bitcoin keeps raising after a fall that we could imagined that it will bump again so bitcoin got its own way of adopting to the economic system for that people will take time to understand.

So according to you,Is there decentralized will be no bubble? while the crypto market at ATH is over $ 1000 billion. That's a huge number and it only took 3 months for Bitcoin to grow to $ 20k. Isn't that a bubble? So please explain to me the difference between dot-com and the growth of bitcoin?

Price fell from 20K to 3K but now the price manages to reach upto 13k ut again it is under 8500 which is not a bubble though.

Once the bubble burst then it will be nothing..!

[poptok1]

I would say there was definitely a mania phase. And it was quite obvious.
Bubble in general is a very overused therm. Today every single thing that significantly gains in value, immediately gets called a bubble.
But in fact only the tulip mania represents a true bubble, with its rapid inflation and sudden burst, only this one matches the definition.
The rest are either a mania, hype or temporary enthusiasm driven by fortunate regulations. Nevertheless that's a good analysis, interesting and thought provoking. There is also the main difference between all of those examples and bitcoin, it is the quantity.
Only bitcoin has a hard, unbreakable limit.

 

[teosanru]

People who cannot understand the idea of introduction of decentralized payment system still saying it as bubble but the fact is bitcoin keeps raising after a fall that we could imagined that it will bump again so bitcoin got its own way of adopting to the economic system for that people will take time to understand.

Rightly said, people don't realize the intrinsic value of BTC due to which it was at a sudden surge. I agree that $19K was an overbloated price for any digital currency at time. But with advent of time bitcoin has shown that it is still useful which means it can be used as a mainstream method of settlement after some improvements.

People even say bitcoin doesn't got any intrinsic value which clearly shows that they didn't understand how bitcoin was made.

Even some economists saying that bitcoin can be made out of thin air so people who want to invest on bitcoin will face losses.After seeing those article I can't be able to control my laugh.

Actually the thing is thin air air is pretty controversial topic. The economists are of an opinion that fiat is not made of thin air because the government has backed all it's nation's asset and GDP before it's creation. While bitcoin is created with nothing but a mere code. I don't completely agree or disagree with them. I think both the currencies are made of thin air. But the thing is that there is no qualification over a currency that only something which takes years of time and resources can be termed as a currency. Currency can be anything that can be used as a medium of exchange and it's value is determined by it's widespread adoption. If we say that currencies around the world are backed by governments then we are wrong. They are actually backed by the people who use them for their business and have constructed their GDP on basis of that currency. Otherwise even Zimbawean Dollar was backed by their government we all know how it ended.

[zhekinsp]

I think both the currencies are made of thin air.

Wrong,bitcoin is not made out of thin air,it were mined by the miners ad got the instrinsic value as well.Proof of work is the electricity we are using to mine the bitcoins.

We can't compare this with printing money because cost for printing $100 is not anywhere near its value and could be same as printing $1.

[yulchatar]

And what about the fact that in economically disadvantaged countries, bitcoin is highly popular and in demand, and used as an alternative means of payment? This is obvious, in my opinion, proof that bitcoin is not a bubble.

[Febo]

This is how a bubble looks defined with different phases. Here is the example of the dot com bubble which went exactly like this:


source: wikipedia

Why you ended dot com bubble at 2003? We are in 2019. Add missing 16 years and see what a bubble dot com companies are right now.

[Sithara007]

The perfect example of a bubble is the dot com boom during the late 1990s, which peaked on 1999/2000. At that time, the technology stocks that underwent spikes in NASDAQ can be classified in to two types. The first type comprises of stocks such as Yahoo, which never recovered from the bust. Yahoo managed to survive for a decade or two, but most of the stocks got delisted almost immediately. The second category comprises of stocks such as MSFT and AMZN, which despite suffering heavy losses during the bust managed to recover and give good returns to those investors who held on to these stocks. The recovery by AMZN was remarkable. The prices crashed by more than 95% during the year 2000 (adjusted prices from $113 to $5). But then it gave returns of almost 350x (35,000%) during the 2000-2019 period.

Now the question is whether we should compare Bitcoin with Yahoo or Amazon. IMO, it resembles more like the AMZN stock.

[CHRISBIN702]

Bitcoin was in bubble status in 2017. No doubt. It's not a bubble though. It just experienced a short burst of bubblish tendencies. Tulip mania also is not real. look up the real history of it and you will find that the accounts are taken from a few extremely biased sources. But as always, don't take my word for it. DYOR and BYOB.

[teosanru]

I think both the currencies are made of thin air.

Wrong,bitcoin is not made out of thin air,it were mined by the miners ad got the instrinsic value as well.Proof of work is the electricity we are using to mine the bitcoins.

We can't compare this with printing money because cost for printing $100 is not anywhere near its value and could be same as printing $1.

Hahah funny you don't realise that even cost of mining one bitcoin is also never $8000 or did you say you burned $8000 for mining a bitcoin? Let's face even if mining bitcoin takes a bit more effort still it is created out of thin code to be more specific. I know most people won't digest this fact but this is truth. Only security which i know takes a lot hell time to build and can't be created out of thin air is gold but it can't be used as a currency. My point was not to undermine the importance of bitcoin but to make clear that the time taken for creation doesn't determine status of money. Nevertheless i am pretty sure btc in its current form is impossible to be used as a replacement of fiat.

[zhekinsp]

I think both the currencies are made of thin air.

Wrong,bitcoin is not made out of thin air,it were mined by the miners ad got the instrinsic value as well.Proof of work is the electricity we are using to mine the bitcoins.

We can't compare this with printing money because cost for printing $100 is not anywhere near its value and could be same as printing $1.

Hahah funny you don't realise that even cost of mining one bitcoin is also never $8000 or did you say you burned $8000 for mining a bitcoin? Let's face even if mining bitcoin takes a bit more effort still it is created out of thin code to be more specific. I know most people won't digest this fact but this is truth. Only security which i know takes a lot hell time to build and can't be created out of thin air is gold but it can't be used as a currency. My point was not to undermine the importance of bitcoin but to make clear that the time taken for creation doesn't determine status of money. Nevertheless i am pretty sure btc in its current form is impossible to be used as a replacement of fiat.

If you consider you were burning your money for mining bitcoin the same applies to gold mining as well.So you can create your own bitcoin! but it will not be same as original since when codes altered then its hardfork not the real one.

Gold was used as curreny too but the convenience and physical mass of gold moved the civilization to choose a paper as money.

[teosanru]

I think both the currencies are made of thin air.

Wrong,bitcoin is not made out of thin air,it were mined by the miners ad got the instrinsic value as well.Proof of work is the electricity we are using to mine the bitcoins.

We can't compare this with printing money because cost for printing $100 is not anywhere near its value and could be same as printing $1.

Hahah funny you don't realise that even cost of mining one bitcoin is also never $8000 or did you say you burned $8000 for mining a bitcoin? Let's face even if mining bitcoin takes a bit more effort still it is created out of thin code to be more specific. I know most people won't digest this fact but this is truth. Only security which i know takes a lot hell time to build and can't be created out of thin air is gold but it can't be used as a currency. My point was not to undermine the importance of bitcoin but to make clear that the time taken for creation doesn't determine status of money. Nevertheless i am pretty sure btc in its current form is impossible to be used as a replacement of fiat.

If you consider you were burning your money for mining bitcoin the same applies to gold mining as well.So you can create your own bitcoin! but it will not be same as original since when codes altered then its hardfork not the real one.

Gold was used as curreny too but the convenience and physical mass of gold moved the civilization to choose a paper as money.

The point isn't that. Point is that money which i am using for mining is not being burned it is being exchanged as someone is selling it. Moreover Bitcoin mining can help me create my own bitcoin is itself a significant fact that it is made out of thin air which is what i am trying to say. Moreover hardfork is something different altogether. Gold wasn't refuted as currency due to its mass but because it can't be created unlimited like fiat which made it a deflationary currency just like bitcoin which is why we are trying to say that bitcoin might not be able to be as successful as a daily currency as we are expecting.

[sarabanda]

The internet is replete with people referring to bitcoin as a “bubble.” They are spreading fear, uncertainty, and doubt galore. They believe bitcoin’s high price spells impending doom, but their criticisms move beyond mere skepticism. It seems like they just hate cryptocurrency. Yet many of these pundits do not fully grasp bitcoin…or even economics. 

[Cnut237]

People really need to start looking at charts using the logarthmic scale instead of the linear scale. For something that has periods of exponential growth, like crypto, a linear chart hides much of the history. Ups and downs prior to an exponential growth phase just get reduced to flat lines, and so the linear chart doesn't tell the story of what actually happened. All you see is what has happened in the latest cycle.

For anyone who thinks bitcoin is a bubble: go to CMC, look at the charts over all time, and then crucially switch it from linear to log view. Voila. The growth pattern is as plain as day.

[teosanru]

People really need to start looking at charts using the logarthmic scale instead of the linear scale. For something that has periods of exponential growth, like crypto, a linear chart hides much of the history. Ups and downs prior to an exponential growth phase just get reduced to flat lines, and so the linear chart doesn't tell the story of what actually happened. All you see is what has happened in the latest cycle.

For anyone who thinks bitcoin is a bubble: go to CMC, look at the charts over all time, and then crucially switch it from linear to log view. Voila. The growth pattern is as plain as day.

Actually this is untrue. Linear charts are equally helpful especially when you want to trade upon Cryptocurrencies. Generally is shorter time frames you won't see much deviation between a linear chart and a logarithmic chart but on longer time frames you will see that logarithmic chart gives an idea of overall trend but linear chart is helpful to tell the important support and resistance levels of markets along with some important breakouts too. Both have their own importance and one cannot undermine the importance of the other.

[NathanJB]

People really need to start looking at charts using the logarthmic scale instead of the linear scale. For something that has periods of exponential growth, like crypto, a linear chart hides much of the history. Ups and downs prior to an exponential growth phase just get reduced to flat lines, and so the linear chart doesn't tell the story of what actually happened. All you see is what has happened in the latest cycle.

For anyone who thinks bitcoin is a bubble: go to CMC, look at the charts over all time, and then crucially switch it from linear to log view. Voila. The growth pattern is as plain as day.

The issue of Bitcoin being called a bubble is not only an issue about its price. The issue of Bitcoin as a bubble goes beyond that. For example, the claim of Bitcoin being a currency is also used as to support the bubble arguments. Detractors are saying that Bitcoin cannot last long enough or even become fully a currency because of its very features. Another argument is its being a bubble asset. It is defined as a sort of fad or trend that is in demand for quite a short span of time only but will eventually burst. 

[ene1980]

When I read this, I remember when 2017 BTC was booming because the price went up, there was a political observer in my country who likened BTC to Tulips so he said that BTC was a bubble

The speculators and observers would love to compare something and they get what they wanted, twenty minutes of fame. The price of bitcoin had a big rally during 2017 and you need not necessarily be a genius to understand that there will be a correction because the price went up so fast in a short period of time, but comparing bitcoin to Tulips is just ignorance as they have no idea what bitcoin is all about.

[teosanru]

People really need to start looking at charts using the logarthmic scale instead of the linear scale. For something that has periods of exponential growth, like crypto, a linear chart hides much of the history. Ups and downs prior to an exponential growth phase just get reduced to flat lines, and so the linear chart doesn't tell the story of what actually happened. All you see is what has happened in the latest cycle.

For anyone who thinks bitcoin is a bubble: go to CMC, look at the charts over all time, and then crucially switch it from linear to log view. Voila. The growth pattern is as plain as day.

The issue of Bitcoin being called a bubble is not only an issue about its price. The issue of Bitcoin as a bubble goes beyond that. For example, the claim of Bitcoin being a currency is also used as to support the bubble arguments. Detractors are saying that Bitcoin cannot last long enough or even become fully a currency because of its very features. Another argument is its being a bubble asset. It is defined as a sort of fad or trend that is in demand for quite a short span of time only but will eventually burst. 

I think they may be right in considering that bitcoin as of now isn't really in its best form to be used as a daily currency. Not because of some errors or bugs but because of some basic reasons which is transaction speed and time. Moreover transaction fees too are known to get higher whenever we see price jumping a bit upwards. If however it is refined a bit and it's shortcomings can be rectified then it may pave it's way towards widespread adoption and people would stop thinking it as a bubble

When I read this, I remember when 2017 BTC was booming because the price went up, there was a political observer in my country who likened BTC to Tulips so he said that BTC was a bubble

The speculators and observers would love to compare something and they get what they wanted, twenty minutes of fame. The price of bitcoin had a big rally during 2017 and you need not necessarily be a genius to understand that there will be a correction because the price went up so fast in a short period of time, but comparing bitcoin to Tulips is just ignorance as they have no idea what bitcoin is all about.

Actually you can't blame them only person who were making such statements were the one who were mainly jealous of this security booming up and affecting the fiat world or the ones who don't understand what cryptocurrency is and look at it as a digital method of payment which is unregulated therefore unsafe.

[el kaka22]

There is a huge difference between paper money versus bitcoin and paper money versus bitcoin. Bitcoin is closer in many aspects to gold than fiat and that is why it is not thin money. Gold can be found on the ground for Christ sake, not anymore since most of the minable ones have been mined and now people are finding very tiny amounts of it but back in the day people literally found it on rivers.

Hence, why I think that bitcoin is closer to gold because right now people are mining 1800 of it but soon that will be 900 and then 450 and will get less and less and eventually will be over 20 million bitcoins which will make sure the selling from miners will go down.

Just because, you can mine it doesn't mean it is from thin air, you spend an effort for it, central banks print money with no effort at all, they just bring 180 billion dollars and give it to banks without any issue, bitcoin is not like that, nobody can print 1 billion dollar bitcoin right away, that doesn't exist.

[Thanasis]

When I read this, I remember when 2017 BTC was booming because the price went up, there was a political observer in my country who likened BTC to Tulips so he said that BTC was a bubble

The speculators and observers would love to compare something and they get what they wanted, twenty minutes of fame. The price of bitcoin had a big rally during 2017 and you need not necessarily be a genius to understand that there will be a correction because the price went up so fast in a short period of time, but comparing bitcoin to Tulips is just ignorance as they have no idea what bitcoin is all about.

People who knew about bitcoin in 2017 may talk like these because price dumped from $20K to $3500 but this was the initial price of bitcoin? They don't know about it so ifnore those losers the volatility in bitcoin's price is high but its not the bubble anymore since we see the price rise and fall many times in its history.

[NathanJB]

People who are calling Bitcoin a bubble are funny. They make us laugh because while they are babbling about Bitcoin as a bubble, the price is constantly rising. The bubble gets bigger and bigger and shows no sign of bursting. For sure many of those bubble gangs are already realizing that they better buy Bitcoin instead rather than throw mud at it because they cannot really pull the reputation of Bitcoin down, not even its price. Those who stick to calling Bitcoin a bubble are people who are too late to buy a decent amount because of the rising prices. These are the people who are full of regrets.