Join 91,648 users already on read.cash

Is Bitcoin (BTC) a bubble?

10 32
Avatar for Infinity
Written by   318
3 months ago

January 21, 2022. No. 134

"Bitcoin is a bubble and when the music stops it will explode" Pascual Blanqué, investment director of the Amundi group.

We are witnessing one of the main falls of BTC and therefore of the rest of the cryptocurrencies for several weeks now. But just a few hours ago, another more prolonged and apparently fierce bearish cycle has begun. No signs of recovery are in evidence and the selling panic has begun. The latest news that has come out has greatly affected the entire world of cryptocurrencies. Some believe that when a market is informal and not supported by anything, the slightest discouraging news greatly destabilizes it.

Throughout history, there have been different financial bubbles, where everyone rushes to buy a product, which in itself has no value or at least would not be worth as much as what is paid for it.

Tulipomania in the 17th century

The first case where a Financial Bubble is evidenced in history is the Tulip Bubble. It all happened in Holland, at the beginning of the 17th century, where the rarity of tulip bulbs caused a speculative frenzy, which ended up shaking the entire country. The first bulbs that arrived from Turkey contracted a non-deadly virus, which made the bulbs more sought after for their exotic appearance. Everyone was obviously curious. Between the years 1634-1637 noblemen, farmers, mechanics, maids, fishermen, chimney sweeps, lackeys, and elderly seamstresses launched into speculation buying the bulbs even with jewelry, land, and furniture.

The price just kept growing every day. To understand the magnitude of the tulip phenomenon, a sailor who mistook a bulb for an onion and ate it to accompany the herring served to him was jailed for several months.

Image for marcustoday - Tulipomania

Some testimonies indicate that the bulbs could change hands up to 10 times in a day. In 1637, when the bubble was about to burst, prices increased by 1,100% in one month. This madness could only end badly. Someone began to sell, the word spread, and the price went down, burying all those who had positioned themselves without measure to give the 'pitch'.

South Sea Bubble

Less than 100 years later, something similar happened in the South Seas Company.

There were times when British trade was constantly booming and this company had special rights that the authorities of the time had granted them and little by little it became the 'golden calf' of which everyone wanted a piece of the cake.

Image from megabolsa

Despite having countless shortcomings, he was hiding them and the price went up and up without a brake. Some directors they knew, went into vertigo when they saw that it was such a high price and it was far from its value, they began to sell and the inevitable began. The shares went from £100 in 1717 to nearly £1000 in much less than 3 years. Everything happened so fast that in 1722 prices returned to their origin.

Isaac Newton, the physicist known worldwide for his advances in Physics and everything that helped us to better understand the universe, was one of those who took the blow, leaving for posterity that he was "capable of calculating the movement of bodies sky blue, but not the madness of the crowd.

Other bubbles have been seen throughout history, such as:

  • Crash of 1929.

  • Financial and real estate bubble in Japan.

  • Asian financial crisis.

  • bubble dot com

  • 2008 economic crisis.

  • Real estate bubble in Spain (1986 to 1992)

Cycle of a speculative bubble

Below is a comparison between BTC and some Financial Bubbles.

Image from medium

The truth is that BTC barely exceeds 12 years of having started and has revolutionized the entire world. As a result of it, the world of cryptocurrencies saw the light and countless possibilities to improve financial independence and not have to depend on obsolete banking systems.

In 2140 the last BTC is mined. It is hard to believe that, by that date, everything has ended before. I don't think so at all.

Image from BitYard

Remember that if you believe in cryptocurrencies in general, then hang in there and HOLD. Better times will come. Do not sell your BTC, your BCH, your ETH, that is what they want, that you sell them so they can buy them at a cheaper price and you end up in losses.

What do you think? This is all? Will the bubble burst?

11
$ 12.16
$ 11.65 from @TheRandomRewarder
$ 0.10 from @PVMihalache
$ 0.10 from @Peter-Molnar
+ 8
Sponsors of Infinity
empty
empty
empty
Avatar for Infinity
Written by   318
3 months ago
Enjoyed this article?  Earn Bitcoin Cash by sharing it! Explain
...and you will also help the author collect more tips.

Comments

The news from Russia not helping either, crypto is for the people yet Russia and China outlaw it, hmm say no more

$ 0.00
3 months ago

I believe that cryptos have a brighter future, hopefully those that we uses these days will not be a bubble that will fade soon; no way hahha

$ 0.00
3 months ago

I heard different things like NFT is a bubble and it will pop. Investors like Warren Buffet doesn't have any BTC and he never will. Vitalik Buterin one of the co-funder of Etherium, who supported BCH at the beginning, but now he is saying, that it is a failure and a scam. I disagree with that.

$ 0.01
3 months ago

There are many who are against it, but development does not stop.

$ 0.00
3 months ago

Ohhhh...no...BTC is dying

$ 0.01
3 months ago

Ahah. How nice it will be to see my wallet when new ATHs arrive 😃

$ 0.00
3 months ago

There's always a time to enter and a time to exit, patience and the ability to control emotions are the keys to succeed with cryptocurrency.

$ 0.01
3 months ago

It's hard, but we can do it. When BTC reach the ATH again, we are going to be with a smile in our faces 😃

$ 0.00
3 months ago

Yeah.. Just hold.. As what Z CEO of Binance once said, you won't get rich if you don't know how to hold.. We really need more patience here

$ 0.01
3 months ago

Indeed my friend. Stay kalm and hold 😊

$ 0.00
3 months ago