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74. Is Bitcoin a bubble? (Published: 13th Nov, 2017)
As BTC/USD moved from $1000 to as high as $7500 this year, more and more investors have become suspicious about this tremendous uptrend. Specifically, they are calling Bitcoin a “bubble”, and often compare it with the Tulip mania which was the first financial bubble. Meanwhile, some are comparing Bitcoin and its underlying technology blockchain to the internet in the 90s and claim that Bitcoin is not a bubble but instead a true technology revolution. This article will list out the arguments on both sides to provide a deeper insight in the debate.

Bitcoin is a bubble

  • “You can’t value Bitcoin because it’s not a value-producing asset.”  Warren Baffet remained skeptical as Bitcoin is not generating earnings or dividends and thus does not have intrinsic values. People buying it are simply betting the price to go up.
  • “The relatively high volume of cryptocurrency turnover, against limited real-world use, suggests that many buyers are seeking speculative gain, never intending to use cryptocurrencies to make a real-world transaction,”UBS said.

Bitcoin is not a bubble

A bubble can only be identified after it bursts. However, unlike the previous bubbles, this time there are a lot more skeptical voices. This might be a good sign, but no one can be 100% true. What we can do is understanding the risk of investing in it and never invest more than you can afford to lose. Selling your house for Bitcoin? No. Learn more about the technology and invest with the best practices? Absolutely worth it.

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