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4 years

Is Bitcoin a bubble?

Hello. When I'm reading on the internet many people say that Bitcoin is a bubble and soon it will break. What is your opinion on that?   

Hello. When I'm reading on the internet many people say that Bitcoin is a bubble and soon it will break. What is your opinion on that?   

2 users upvote it!

5 answers


Dawid Wośniowski

According to me, Bitcoin can be a bubble. Bitcoin has been responding poorly to data for some time now, e.g. to information about restrictions in various countries (China, Venezuela), the prices are falling and then quickly returning to the old values. The only thing that causes bigger drops is the DDOS attacks on the exchanges, which can be a sign that the prices are not real.

The secret of some cryptocurrencies is the ownership scheme of a large part of the coins, as a result of which 17% of all BTCs have 115 people and another 21% have 1624 addresses, which, when accumulated in such a way, allows for easy formation of price collusion.

An additional argument is the lack of any regulations, apart from the regulations of the Cryptocurrency exchanges.  This makes it possible to use various techniques of exchange manipulation and, consequently, artificially pumping the price. The funny thing is that some currency cooperatives don't even hide with it, although it concerns mainly little known cryptocurrencies, which pumping is not expensive.

According to me, Bitcoin can be a bubble. Bitcoin has been responding poorly to data for some time now, e.g. to information about restrictions in various countries (China, Venezuela), the prices are falling and then quickly returning to the old values. The only thing that causes bigger drops is the DDOS attacks on the exchanges, which can be a sign that the prices are not real.

The secret of some cryptocurrencies is the ownership scheme of a large part of the coins, as a result of which 17% of all BTCs have 115 people and another 21% have 1624 addresses, which, when accumulated in such a way, allows for easy formation of price collusion.

An additional argument is the lack of any regulations, apart from the regulations of the Cryptocurrency exchanges.  This makes it possible to use various techniques of exchange manipulation and, consequently, artificially pumping the price. The funny thing is that some currency cooperatives don't even hide with it, although it concerns mainly little known cryptocurrencies, which pumping is not expensive.


dryer923

It is currently estimated that 99.5% of bitcoin transactions are traded on the exchange. So people buy bitcoin only to sell it more expensive. Nobody needs it for anything. Nobody wants to pay for it. It is pure stock market speculation that drives price drops and rises.

When the price rises, people buy to make money because they see an opportunity running out. When the price drops, people panic because they bought bitcoin just to make money. They don't need it for anything, so it makes no sense to keep it in a situation where its price is falling. Pure greed and fear of loss - psychological mechanisms.

But why do people buy gold? They don't pay it in stores, and bars or coins aren't bought to make jewelry out of them. Gold is bought to store the value of money. It is also a form of speculation that gold will not lose its value against the dollar, or euro for years, but on the contrary, in difficult times of crisis, it will allow you to earn on exchange rate differences.

Why do people buy apartments? More and more often than not, it is not to live in them, but to invest capital in them. To rent and earn money to increase their value. The more people who buy to make money and sell more expensive, instead of using it, the higher the price... this is how any speculative bubbles are inflated.

Why do people buy shares of Amazon, Facebook and other companies? Just like bitcoin. To make money. This leads to situations in which the long-term revenues of these companies (not to mention the dividend itself) are many times lower than the market valuation of their shares. This is nothing more than another speculative bubble, completely detached from the real value of these companies, their prospects for further development and expected profits.

As you can see, the majority of the world economy is currently based on speculative bubbles, bigger or smaller... if we add to that the mass printing of money by banks, mechanisms of granting loans and multiplication of all securities, futures contracts... our whole economy is based on a series of speculative bubbles much bigger than the one on bitcoin.

It is currently estimated that 99.5% of bitcoin transactions are traded on the exchange. So people buy bitcoin only to sell it more expensive. Nobody needs it for anything. Nobody wants to pay for it. It is pure stock market speculation that drives price drops and rises.

When the price rises, people buy to make money because they see an opportunity running out. When the price drops, people panic because they bought bitcoin just to make money. They don't need it for anything, so it makes no sense to keep it in a situation where its price is falling. Pure greed and fear of loss - psychological mechanisms.

But why do people buy gold? They don't pay it in stores, and bars or coins aren't bought to make jewelry out of them. Gold is bought to store the value of money. It is also a form of speculation that gold will not lose its value against the dollar, or euro for years, but on the contrary, in difficult times of crisis, it will allow you to earn on exchange rate differences.

Why do people buy apartments? More and more often than not, it is not to live in them, but to invest capital in them. To rent and earn money to increase their value. The more people who buy to make money and sell more expensive, instead of using it, the higher the price... this is how any speculative bubbles are inflated.

Why do people buy shares of Amazon, Facebook and other companies? Just like bitcoin. To make money. This leads to situations in which the long-term revenues of these companies (not to mention the dividend itself) are many times lower than the market valuation of their shares. This is nothing more than another speculative bubble, completely detached from the real value of these companies, their prospects for further development and expected profits.

As you can see, the majority of the world economy is currently based on speculative bubbles, bigger or smaller... if we add to that the mass printing of money by banks, mechanisms of granting loans and multiplication of all securities, futures contracts... our whole economy is based on a series of speculative bubbles much bigger than the one on bitcoin.


cryptoboy

Bitcoin is actually fun, for people who like risk. And only afterwards will it be possible to tell who has gained who has lost. Because although the expected profits are high, the risk is also high. And that means that these predicted profits do not have to come true at all and instead a great loss will come true :(. Unfortunately, there are no wise people when a bubble bursts (and if it is a bubble at all). 

Bitcoin is actually fun, for people who like risk. And only afterwards will it be possible to tell who has gained who has lost. Because although the expected profits are high, the risk is also high. And that means that these predicted profits do not have to come true at all and instead a great loss will come true :(. Unfortunately, there are no wise people when a bubble bursts (and if it is a bubble at all). 


leomessi

In my opinion, today the biggest real value behind bitcoin is its globally recognized brand. Bitcoin = cryptocurrency = blockchain. Most people in the world probably don't see the difference between bitcoin, which to them is the only recognizable cryptocurrency, and blockchain technology. A globally recognized brand alone can be worth a lot of money.

All of this makes it interesting for financial institutions and large corporations to use bitcoin as an alternative form of investment. They can make it into digital gold, which they will sell in bundles as intermediaries to various investors, while making money on speculation themselves. They can do this for profit, and the real value of bitcoin has little to do with it, as creating value out of thin air and selling every new piece of paper with the word "security" on it is standard today.

In my opinion, today the biggest real value behind bitcoin is its globally recognized brand. Bitcoin = cryptocurrency = blockchain. Most people in the world probably don't see the difference between bitcoin, which to them is the only recognizable cryptocurrency, and blockchain technology. A globally recognized brand alone can be worth a lot of money.

All of this makes it interesting for financial institutions and large corporations to use bitcoin as an alternative form of investment. They can make it into digital gold, which they will sell in bundles as intermediaries to various investors, while making money on speculation themselves. They can do this for profit, and the real value of bitcoin has little to do with it, as creating value out of thin air and selling every new piece of paper with the word "security" on it is standard today.


OpenAI BOT

In my opinion, whether Bitcoin is a bubble or not is a matter of debate. While it has certainly experienced significant price fluctuations, it is also being increasingly adopted by mainstream institutions and investors. Only time will tell if Bitcoin is a bubble or a legitimate asset class.

In my opinion, whether Bitcoin is a bubble or not is a matter of debate. While it has certainly experienced significant price fluctuations, it is also being increasingly adopted by mainstream institutions and investors. Only time will tell if Bitcoin is a bubble or a legitimate asset class.


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