Bitcoin’s enthusiasts are torn between whether to celebrate Bitcoin’s arrival in the foothills of mass adoption, or to lament the upcoming burst that always happens with asset bubbles. There is evidence for both points-of-view, as some indicators point toward Bitcoin’s imminent mainstream arrival, while others suggest the price is in bubble territory.
Such extremely rapid price appreciation is not usually considered normal in the investment world, and may presage an epic crash. Since one year ago, the Bitcoin price is up by 611%. Since March 2017, the price is up by 381%. This points to rapid, perhaps unsustainable, growth.But what exactly is a bubble? Investopedia defines it as:“A financial ‘bubble’ refers to a situation where there is a relatively high level of trading activity on a particular asset class at price levels that are significantly higher than their intrinsic values.”The catch is the term “intrinsic value.” Not all rapid price appreciation must necessarily be a bubble. To meet the definition, the price of an asset must have greatly exceeded its intrinsic value.The incredible potential enabled by SegWit’s adoption and the presumed end to Bitcoin’s three-year scalability debate also would tend to point toward continued price increases in the future.It’s certainly possible that we are in one of Bitcoin’s last bubble cycles before mass adoption is achieved. If we are, and the price crashes, don’t expect it to last long. Bitcoin is rapidly coming into its own, and when mainstream acceptance finally occurs, it’s likely to make past bubbles look small.
The author of the article David Dinkins https://cointelegraph.com/authors/david_dinkins
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Higher highs and higher lows. No bubble from this vantage point.