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Bitcoin is a Financial Bubble.

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Avatar for Frankmart
Written by   47
1 month ago

Happy day dear Read.cash Community, I hope you are enjoying the day are all well, today I bring you information about the Bitcoin and the reason why it is a Financial Bubble.

People do not invest in Bitcoin because they are too afraid of losing everything or being scammed.

For those of us who are unfamiliar with the subject, a Financial Bubble is a phenomenon used to check for abnormal rises in an asset. This is an inflation in the market in an abnormal way, producing a rise in price that cannot be controlled, without any reason to support it. This happens when there is a lot of speculation around the market. When the asset reaches a very high price, the bubble bursts and the price falls out of control, losing all its value, leaving many investors bankrupt.

If we educate ourselves we will know what are the reasons why the bubble occurs, it is normal it is repeated over time, the bubble is not a problem, in Bitcoin market cycles occur that happen every 4 years on average, are downtrends and uptrends, the event that marks it is the Halving, We know that the total Bitcoin to mine are approximately 21 million Bitcoin in circulation, it is a limited supply, at this time there are 18 million that have been mined.

Satoshi Nakamoto by protocol, put in the system that every 4 years the amount of Bitcoin created is cut in half. Miners mine a block every 10 minutes on average, in the block chain new Bitcoin are created, 6.25 Bitcoin are being generated at the moment, but at the beginning it started with 50 Bitcoin after four years were 25 Bitcoin, four years later were 12.5 Bitcoin and at the moment are 6.25 Bitcoin, which means that we have had several Halvings, one of them was in 2016, by 2017 the price skyrocketed, another halving was in 2020, which happened in 2021 the price skyrocketed again and we are still not done. This event serves as a reference for us to see these bullish and bearish movements that many people see it as a Bubble. Those who use the system know when it is up and when it is down.

At what point are we now?, we have an uptrend, in 2020 it was a growth of more than 300% but it was progressive, because institutional money entered, big capitals and now we are in the FOMO (fear of missing out) stage, whose mistake is to invest emotionally, the ideal is to invest down and sell up, but if we act emotionally we inflate the price, it is fine to invest, but we must know how much it is rising and what could be the maximum point of growth, as happened in December 2017 people invested in the rise and sold when it began to fall, they sold out of panic. We must be active in the ecosystem to know at what point we are, there are always corrections, that is the price goes down and you can get confused thinking that the uptrend ended, these corrections are natural and necessary for the price to consolidate, usually corrections of 20%, these consolidations take about 2 or 3 weeks before going up again, we must definitely be active so that it does not generate emotions and we do something wrong.

The Bubble issue, we do not call it a Bubble, they are market cycles that repeat themselves, there are downtrends and uptrends. And to be a little calmer the year Bitcoin mining is estimated to end is the year 2140.

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November 19, 2021

References:

Photo Cover: https://www.criptonoticias.com/opinion/puede-ser-bitcoin-burbuja/

https://inviertenbitcoin.com/bitcoin-halving/

https://cointext.com/es/glosario/burbuja/

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Avatar for Frankmart
Written by   47
1 month ago
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Comments

ah FOMO that causes trouble for people!

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1 month ago

It has also happened to me a lot buying in FOMO, but I have been very lucky that it has continued to rise, but I try to control myself.

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1 month ago