Volatility has been Bitcoin’s constant companion ever since it’s inception.
Skeptics and critics alike will always make it a point to remind you of this.
In fact, the new hot buzzword is the bitcoin bubble.
Bitcoin is booming and there are many people out there just waiting for it to bust.
Bitcoin has been performing very well this year
In fact, it’s up nearly 400% in the past year.
Even despite a few corrections the past few months, Bitcoin has well out performed more well-known investment avenues like the S&P 500.
This has led to a few big name investors to speak up and prove that Bitcoin is still misunderstood and underestimated by the mainstream media and is still an unknown to the majority of people at this point.
We’ve got people like Jim Cramer who is crediting the future price of bitcoin hitting the golden $1million mark purely because he thinks European banks will need to buy a lot of bitcoin to prepare for future cyberattackers demanding payments in BTC.
Not only are the European bitcoin exchange markets ranked 5th in terms of trading volume, but furthermore, the biggest ransomware attack EVER gained a whopping $100,000.
So to attribute the future million dollar BTC price on this misguided assumption is proof enough that bitcoin and cryptocurrency is not well-known to this guy.
When Mark Cuban is saying Bitcoin is in a bubble because “everyone” is saying how easy it is to make money if you buy bitcoin, he’s also mistaken.
Go to your local gas station or grocery store and ask the clerk or fellow customer if they own any bitcoin.
Go ahead and ask everyone you come in contact with during the day.
The fact is that relatively very few people have heard of bitcoin, let alone have taken the time to look into it, and even fewer still have taken the time to figure out how the heck to buy it.
If you want to decide for yourself if we are experiencing a bitcoin bubble, it’ll help to understand what a market bubble is.
Investopedia defines a bubble
"...an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate."
http://www.marketwatch.com/story/is-bitcoin-in-a-bubble-this-metric-suggests-theres-more-room-to-grow-2017-06-08
Basically you know it’s a bubble when the vast majority of people are investing in an asset just because everyone else is investing in it. This causes the price to quickly rise well above what it’s valuation should be. The bubble pops when there are no more unsuspecting, uneducated investors to buy into the hype and panic selling kicks in.
The main reason why I don’t believe bitcoin is currently in a bubble is because the pool of potential investors is international.
Can you wrap your head around the millions of people who have yet to buy into bitcoin or cryptocurrency in general and what that will do to the price of bitcoin?
Don’t get me wrong, I’m sure there will be more price corrections in the future but I believe the price of bitcoin will continue to rise.
Skeptics love to call this a bitcoin bubble. Now I’m not here to tell you what to invest in and when, but I feel the need to clarify what a bubble is so that you can have some knowledge on this subject and come to your own conclusions.
Additional Reading/Sources:
Investopedia Definition of Bubble
Jim Cramer's Attempt at predicting BTC price
Mark Cuban Thinks BTC is in a bubble
MarketWatch Article Shows BTC has "Room to Grow"
ZeroHedge Article Gives Great Explanation of BTC Bubble Hype
BTC Chart
Great post that describes about bitcoin bubble. I really love the post.
I absolutely love your post. This is something I keep saying to people who use the bubble term. Most people dont even know what bitcoin is. Bitcoin may hit a bubble at some point in the future, I mean im sure its possibly destined, but we are nowhere near close to that now, this is just the growth phase, which is exciting for all those who are apart of it right now, cause this has not hit the mainstream yet. People have no idea, they cannot conceive yet what this actually means. The entire world will change.
I doesn't have to ever go into a bubble if the dollar goes down. Million dollar bitcoin is a given, but will a million buy an island, a house, a car, a vacation, or a coffee.
Thanks @heiditravels for the post. I like the perspective you take regarding how many millions of people globally who have the opportunity to invest or buy into Bitcoin. I personally don't think it's a bubble either but I am no expert on economics or investments
A stock market bubble is when your cab driver is telling you about a hot stock investment.
Bitcoin isn't even close to being in a bubble.
I talked to every lyft and uber driver, they say i heard about bitcoin but have no idea what it is lol
I like your definition of stockmarket bubble. I am not sure about your conclusion. In the pub down the street where I live we regularly discuss cryptocurrency investments. That pub is also frequented by cab drivers.
Make it the shoe shine man.
Two real reasons why some people like Bitcoin to get busted:
They are shorting bitcoin ( their losses are increasing as bitcoin rises)
Envy/Jealous - they don't have bitcoin at all and want to buy at Low Price.
Here's why a lot of people are so negative about Bitcoin and cryptos:
I saw this a few days ago... still laughing! :)
it is clearer to understand with pictures :-D
I like the image lol😂😂
Hi, it is funny, my bet is bitcoin is still at a low price ;) the bitcoin bubble is hype but also true depending on your opinion on what is a bubble, some say all that have no physical backing is a bubble from the time of its creation just needs time to grow to its poping point which bitcoins bubble is a long way from yet, I think.
Thanks man for sharing your opinion.
I LOVE EVERYTHING about your blog and always look forward to your youtube vids keep up the great work Heidi. Let me know if you ever need any photos would love to collab!
Awesome!
What it is like riding Bitcoin bubbles: an adventure through the present cryptocurrency explosion
Check out my latest article as well on why Bitcoin and cryptos are no where near bubble territory
Completely agree! Upvoted:-)
I think you'll find that most bubbles also occur where there's been a distortion in the market caused by easy credit.
Bitcoin's current run can easily be explained by supply and demand.
There's a limited supply and an increasing demand.
Maybe if you had a Central Bank offering free fiat money to go buy crypto, you might be able to artificially generate a bubble, just like all the other bubbles they've created.
So true it is completely misunderstood by most people! Jim Cramer is a smart man for being on the bitcoin train! My own brother thinks Bitcoin is a scam but I tell him not one person or government controlls the supply I tell him how people thought that the internet was a bad idea in the 80's to just how his thinking is.
Great video, Heidi. Most people barely know what bitcoin is. There will be corrections all along the way, but I agree, we're no where close to the full "bubble" potential.
"The fact is that relatively very few people have heard of bitcoin, let alone have taken the time to look into it, and even fewer still have taken the time to figure out how the heck to buy it."
I find the timing of your post perfect to what I just experienced this morning. My mind was floored when my long time barber who is nearly 60 years old asked me "If I have ever heard of bitcoin."
I posted the story here -The Lady Who Cuts My Hair Asked Me About Bitcoin - She is Almost 60
The story I write about there kind of surprised me in how bitcoin and the crypto world is slowly starting to sneak into ordinary persons lives today.
However of course those knowledgeable in this area knows it has a long way to go to be adopted by the masses, mostly the ease of use of crypto needs to be worked on to simplify for the less savvy person.
On the Mark Cuban comments - I love that guy on the TV show Shark Tank, it is one of the few shows I watch on tv. I however wouldn't get my crypto currency advice from him though :)
My thoughts though that bitcoin is going to trend downwards with some adjustment at some point. I am not sure I could soundly say it could keep pace at its current growth without a mass dump on the market, but I think bitcoin has proven it can handle it already. But volatility is the name of the game with bitcoin like you said :)
@heiditravels "do you like what you see here?" sounded so wrong somehow :)
In my opinion there is no bubble, it's always a rise and a consolidate at the same price.
Of course Bitcoin is not a bubble. It's fiat in a bubble:
https://steemit.com/comic/@lighteye/b-c-stands-for-blockchain-sep-09-2016-bubble
I also think there is no bubble. It can grow a lot more before fuel runs out.
For more thoughts: https://steemit.com/bitcoin/@wekkel/bitcoin-in-a-bubble-no-way
I agree with you that bitcoin is not in a bubble as I remember correctly in all the previous bubbles, almost all the people on the street are invested in it and the media have a field day in it as well. Thanks for your thoughts.
Not a bubble yet... the sheeps has yet to come in... when that happens, then a nice price correction :)
Such an excellent point you made about asking people if they've heard of bitcoin.... Hardly anyone knows about it when you consider the enormity of this world. Excellent writing and analysis, @heiditravels
Upvoted!
<3 You is right on the money.
Must agree... Same analysis by several people, BTC is not a bubble... Very far from it, in fact, BTC still undervalued...
If it is in a bubble; it isn't popping any time soon lol maybe not even this century ^_^ thanks for sharing!!
"The main reason why I don’t believe bitcoin is currently in a bubble is because the pool of potential investors is international."
The question to me is: is there something else to what they are thinking ignoring this fact alone?
I live in Europe and everyday I woke up during May I saw the price jump. The next big price move would be the next day. I was not thinking this crazy price movement was going to last, but it was clear where the source was: Asia. This is one reason to consider in the bullish case for Bitcoin. I buy a stock in my brokerage, the only ones cleared to own that are citizens, residents and funds who have access to the market. Bitcoin doesn't have this limitation and it in itself is in the intrinsic value proposition (hey, like gold!)
But still, is it in a bubble? It's not like there is a specific valuation you can point to, like for stocks. Can it crash? Yes it can and maybe the watershed moment of this year will be August 1st to which direction it will go in.
Very good points and many of which I have as well. A bubble is something that is overbought and people are just shoving money in it with nothing to back it up.
That is the further thing from happening right now with bitcoin.
There is only 100 billion in crypto currency and just one financial institutes has 1.9 trillion in assets they can invest. That's just ONE! (Fidelity by the way)
We are far from the top on this, of course we will see ups and downs that's just natural but the overall trend continues to support growth with much room for growth still out there.
Nothing could be more true than this.
Good post @heiditravels. I recently posted an article about the limitations of steem and bitcoin however am still bulish on both cryptocurrencies and believe that developers will work on the issues ...Both are here to stay. Great post
Thank you for this awesome video :) I am also totally on your side and think that there is still way more investors to come in ;)
I think that BitShares will replace bitcoins in a few years if it keep going like this days!
Hi heiditravels,
Yeah your right, Bitcoin isn't in a bubble.
Thanks for sharing the advice!
I am optimistic.
I have been saying for a while when it comes to currency if you cant print more then there no way it can be in a bubble theres a fixed supply it depends on network effect the more people use it the more value it will attain and more people will want it unless it becomes obsolete for whatever reason it will fail the bubble will not pop it will just fail i dont think theres a fair value for a bitcoin
Oh my @heiditravels runs a crypto tips youtube channel. I used to love your posts about travel guess i need to remember to press FOLLOW button.
People who love crypto love to use the world Bubble...
If bitcoin is in a bubble then there are so many people in bubbles of not knowing anything but I don't think it is the case
The only bubble about to blow up is the illusion of financial freedom through centralized money, centralized governance.
Very good points. Also my views. Upvoted. Thanks for advocating the cryptonomy! :)
Not only millions of people don't know about it, but literally billions of people don't know about it.
If the scaling issue is resolved and we don't have quantum computers atleast in near future ,btc should hit 5000 usd easily
Hi Heidi. Please also have a look at my latest article on why Bitcoin and cryptos are absolutely not in a bubble. It's written so as to be easy to understand for just about anyone. I would be very happy to get your feedback on it as well.
I agree with you, bitcoin isn't in a bubble. But I think that other crytocurrencies will gain space over bitcoin. When that happen the price of bitcoin will decrease. This is because Bitcoin has some problems (time, scalability, governance, ... ) and this have been solved by others. Despite all this bitcoin still has much to give. Great post!
Exactly, bitcoin and even blockchain hasn't even reached mainstream yet, especially in the United States, so there is so much breakout potential in store! It's way too early to be talking about a bubble - the BTC rocketship is too busy getting ready for liftoff!
Excellent snapshot of bitcoins upside @heiditravels. We still have many years of price growth YOY as it becomes mainstream ecurrrency. Upvoted and following. Follow back.
Bitcoin is not a Bubble! This Word sucks the last days!
Awesome, this is already the second article I can send to my step-dad, a inveterate bitcoin-sceptic. He's the oldschool gold guy, hasn't really looked into BTC tech and therefore (despite all my explanaitions) still believes BTC is in a bubble.
Thanks for your efforts in the crypto space.
Hi Heidi it's been a long time. You have come a long ways from hitchhiking. I don't know that you'll remember me but I just thought I'd drop in and say hi.
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i love very much to yours. thanks very much
This is great, but what if the price rises so fast that by the time everyone wants to buy bitcoin they are warded off by how expensive it is...which could create a bubble as well
Nice post! Btw. BTC going up to 3000 very soon! :)
Thanks for the clear explanation on what a bubble even is, in the first place. Good old facts and common sense. Got it!