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Why Bitcoin does not fit the definition of a bubble (Topic)

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Why Bitcoin does not fit the definition of a bubble

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A large number of respected figures in the current financial sector, including Jamie Morgan (CEO of JPMorgan), refer to Bitcoin as a bubble.

But this is fundamentally wrong given the decentralization, automaticity and transparency of the nature of the Bitcoin system.

Bitcoin is not a bubble

This cryptocurrency is not a bubble, despite the constant attempts to convince an ordinary user of this by representatives of banks and other financial systems.

Yes, there was a bubble in Bitcoin. But this phenomenon marked the distant 2013. Then the level of demand for virtual currency became so high that the market was unable to support it.

And then the cost collapsed from one thousand three hundred dollars to two hundred. However, this does not at all give the right to call the entire system a bubble, because, with the same success, this definition can be summed up, say, Tesla or Amazon.

Until April of this year, analysts were of the opinion that the existence of an exponential rise in the value of Tesla testifies to its bubble-like nature. And talk about Amazon has been going on for twenty years, since the company was founded.

Is Tesla a bubble too?

Tesla-company

Earlier this year, in a note from the Transportation Editor of Business Insider, it was said that for him the status of the Tesla bubble has become apparent since the beginning of the year. And it scares him how much he has grown.

He is echoed by an expert from Greenlight Capital named David Einhorn, who is categorically convinced that the bubble called Tesla will burst sooner or later, although it may not happen soon.

At the same time, all critics pretend that they are not aware of the regularity of this trend in almost every developing company, start-up or technology.

These arguments are overshadowed in the eyes of analysts and other professionals by the rate of increase in value and the existence of an exponential law, which, they believe, gives them the right to call this phenomenon a bubble.

In four years, starting from 2013, the price of one Tesla share has grown from twenty dollars to three hundred and two, having undergone many small and significant changes. December saw them fall by more than a hundred dollars, which was due to the company's problems on the financial front.

However, it did not take very long to restore the quotes and develop a stable business. In addition, a market and consumer base was organized, reminiscent of the one with the help of which Bitcoin was able to become a reliable network with an established market and more than one tens of millions of customers.

Wozniak and the golden bitcoin

Steve Wozniak, during the Money2020 conference, called Bitcoin one of the most legitimate systems. He noted that the number of crypto coins that can be put into circulation is limited.

Comparing the virtual currency with the precious yellow metal, Mr. Wozniak emphasized that gold mining has been going on for many years and there is no end in sight, while the maximum amount of Bitcoins, with their mathematics and regulation, cannot be changed by anyone.

The Topic of Article: Why Bitcoin does not fit the definition of a bubble.
Author: Jake Pinkman


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