Is Bitcoin a bubble?
Robert Shiller, a Nobel Prize-winning economist, proposed a strategy that helps determine if something is a bubble. Said definite increases in an asset’s price, surpassing public excitement, media craze, stories of people getting rich, and growing interest in the global public’s asset. Bitcoin checks all the cases.
So, in a way, Bitcoin is a bubble or not, and it has burst before. After the famous Exchange closure of Mt.Gox in the year 2014, formerly, the most notable Bitcoin exchange in existence filed for bankruptcy because of technical problems and the losses of 744,000 Bitcoin of its users. The number made up about six percent of 12 million Bitcoins in circulation at the time. A Chinese exchange handling over 70% of all the Bitcoin transactions worldwide, BTC’s prices fell continuously for about a year. Of course, it is hard to predict what will happen in the future, and there is a possibility of Bitcoin’s prices falling again. Still, Bitcoin has recovered before, and it is currently more substantial than it ever was.
In the year 2018, there was a massive sell-off pressure from January 2018 to February 2018 the bitcoin price remains half, while in some countries, it goes down about 70-80% because of its regulation. Many countries took strict action against money laundering in bitcoin. Not the bitcoin goes down, but also, other cryptocurrency goes about 80-90% down. So we can say 2018 is the critical year for all cryptocurrency users. Now bitcoin again, going up and breaking all the records.
Thousand of cryptocurrency in the market :
In the crypto market, there are many cryptocurrencies listed with promising good value. In January 2018, many altcoins were listed, and most are scammers. So we can say it like the Dot-com bubble: they don’t have any business plan.
Initial coin offering (ICO)
When for the first time, the new cryptocurrency token comes into the market known as Initial Coin Offering (ICO) in the cryptocurrency industries. It is equivalent to an Initial Public Offering (IPO). ICO or IPO acts, in the same way, to raise funds from the marketplace. Interested investors can take part in ICO, and if he/she is eligible, they will get tokens into their wallet.
In the year 2017-18, many ICO was ready to come into the marketplace. Bittrex and Binance were the most significant exchanges that offer the Crypto Trading Platform services with a high volume. All the ICO transferred into the Exchanges wallet addresses. After this, the ICO to trade into the markets. The people who don’t have any company or not offering any services they also come with their ICO and start collecting a huge amount of money from the marketplace. After this, the investors lose all their money.
Multilevel marketing (MLM)
Multi-Level Marketing is also a big scam in the cryptocurrency industries. Many people run the Ponzi Scheme. Some companies say that they will double the money of their investors within a year. Some people became rich within a year, and some people have lost their life-saving.
In the year 2018, the bitcoin price drops very low. Many investors lose their money. In the current year, the Bitcoin price is almost recovered.
So no one can say that Bitcoin is a bubble or not.
This gives a lesson to invest that much money that you can afford to lose.