There’s currently no shortage of articles out there asking whether Bitcoin is currently in the midst of a speculative bubble. Lazy comparisons with the Dutch tulip craze of the 1600s are made, as commentators seek to justify the rapid ascent in prices over the past few years. On the other side of the equation, Bitcoin advocates can be heard saying “this is just the beginning.”’
This article is not the place to say whether Bitcoin is in the middle of a bubble or not. When looking at the price of Bitcoin for trading or investment purposes, people need to make their own mind up. Outlined below are two philosophical views on whether Bitcoin is in a bubble or not. Consider both when deciding where you stand on the debate.
Yes, Bitcoin is a bubble
Bitcoin rose over 1,000% over the course of 2017 alone, faster than any other asset. Several respected commentators, among them Jamie Dimon, the CEO of JPMorgan Chase, have said that Bitcoin is a bubble and that investors should beware. The number of casual speculators taking profit on Bitcoin’s price only lends to Dimon’s opinion.
No, Bitcoin is not a bubble
The fact that Bitcoin rose 1,000% in a few short months reflects a confidence in its future, rather than irrational exuberance. During the dot-com bubble and subsequent crash at the beginning of the 21st century, Amazon’s price rose to seemingly unjustifiable levels before falling again. At its height its stock was valued at less than $100; now Amazon is valued at more than $1,200 and few people are calling it a bubble.
Oh, and Jamie Dimon started out by saying that Bitcoin was a fraud before later retracing that statement and saying that he regretted it.