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.

Is Bitcoin a bubble?