Is Bitcoin The Biggest Speculative Bubble In History?

If it feels like BitCoin is leading the crypto currency news every single day, that’s probably because it is – and has been for more than three years now.

Once considered nothing more than a fun little project that wasn’t ever going to gain any traction, it used to be possible to buy hundreds of BitCoin for less than a dollar or two. Makes you wish you could climb back into a time machine, doesn’t it?

And while BitCoin and a lot of other crypto currency options (like Ethereum, for example) have seen their overall value skyrocket to insane peaks – BitCoin hit $20,000 a coin in December 2017 – and then come crashing back down again there are still lots of folks out there that aren’t quite sure of whether or not BitCoin is a “bubble” or if it is the real deal.

Hopefully we are able to shed a little bit of light on the subject for you going forward!

How Does The BitCoin Bubble Stack Up Throughout Time?

We don’t necessarily agree with the idea that BitCoin is a bubble (though there are plenty of people disagree and say where there’s smoke there’s inevitably fire), but it’s impossible to ignore the meteoric rise in value BitCoin has had in just the last five years or so.

Like we mentioned above, BitCoin went from being essentially useless and nothing more than an internet meme into one of the most transformative crypto currency options available on the planet in no time at all.

A lot of people feel like this meteoric rise lends itself to a bubble more than anything else, and there’s plenty of history to backup that prognosis.

In the 1600s, tulips became ridiculously valuable in the Netherlands. In a four-year span of time prices for tulips rose by factor of 200 – and in the blink of an eye the value fell right through the floor, wiping out entire empires that had shifted their traditional business focus over to growing more and more tulips.

More recently we have seen skyrocketing value like BitCoin in the Dot Com bubble of the late 1990s and the early 2000s.

The internet transformed the business landscape completely in ways no one could have ever existed, and in March 2000 the value of all NASDAQ listed companies had hit $6.7 trillion. Shortly after that, the bottom fell out of the internet wave, companies folded faster than anyone could have expected, and the first few digital millionaires found themselves back in the poor house almost overnight.

BitCoin for sure has enjoyed the same kind of rocket ride to almost unbelievable value as those other big historic bubbles, but there’s plenty of reason to believe that BitCoin isn’t a bubble but is instead riding an S-curve.

Inefficient Markets Have Slowed Growth Significantly

When crypto currency really started to go mainstream about a year or a year and a half ago the value of BitCoin, Ethereum, and most every other crypto really started to shoot through the roof.

However, the market wasn’t ready for this explosion in interest and certainly wasn’t prepared for the volume of trading that wanted to be pushed through the market at that particular point in time. Inefficiencies really slowed down the growth of BitCoin, inefficiencies that still exist in the trading market today.

At the height of crypto currency trading (about a year ago) it could take hours – even days – for a single trade to be confirmed. It was impossible to track the value of BitCoin, Ethereum, and other crypto currency options with any real accuracy, simply because trades weren’t being executed until hours after they had been made.

It was a speculators game for sure and that made more than a few people nervous. This inefficiency has continued to slow the growth of BitCoin, but the markets and platforms for trading crypto currency options are becoming more and more efficient on a daily basis.

Has The Cryptocurrency Bubble Burst?

It’s important to recognize that crypto currency bubbles are as likely to happen as any other investment vehicle, but it’s equally important to recognize that ANY asset that was going to have its value increase by anywhere between 20 times and 2000 times its original value was inevitably going to go through a market correction.

Blockchain technology, the foundation for BitCoin and every other crypto, isn’t going away anytime soon. In fact, more and more industries are starting to leverage everything blockchain solutions have to offer, and the technology is only going to continue to improve as time goes on.

Combine that with a global economy that is starving for a truly decentralized form of currency that makes a lot more sense in our always on digital world than anything else currently available and it’s easy to see how BitCoin isn’t just going to continue to survive – but will continue to become more valuable and thrive as time goes on.

Sure, BitCoin growth has slid back considerably from the heyday of just a year ago. But it wouldn’t be all that impossible to imagine BitCoin being worth $100,000 or more a coin in no time at all, either.

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