An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is trade in an asset at a price or price range that strongly exceeds the asset's intrinsic value.
We can't escape it... Whether it's at work, on the news, in our Facebook feed, or right here on Steemit... Bitcoin is one of the hottest topics in the world right now. For every person that thinks it could reach $50,000 by the end of the year there is another person who thinks the bubble is about to burst and everyone is going to lose their money. There is the obvious, more recent comparison to the dot-com bubble but I've even heard some make comparisons to the "Tulip Mania" craze that took place in the 1600's during the Dutch Golden Age. This was a period of time where the prices of tulips rose to extremely high levels and than collapsed just a couple of years later. So is Bitcoin the next Tulip Mania or Dot-Com bubble? I'm really not so sure of that because in my opinion you can't stop progress and innovation in this world, and blockchains are the future.
Let's think about the dot-com bubble for a minute. People act as if when this bubble burst into flames the Internet went away forever. Yet, here I am posting a blog on a dot-com. I'm sure many people on this site buy products from Amazon or eBay, or perform searches on Yahoo or Google. Sure, when the dot-com bubble burst there was a lot of money that was lost, but it didn't put the Internet out of business. The companies who had strong foundations and good leadership rose to the top while the weak companies went out of business. I believe this theory could hold true if there is a Bitcoin bubble.
Let's assume for a moment that Bitcoin is a bubble that is going to pop one day soon. I even read in an article earlier today that a "Wall Street Executive" predicts Bitcoin will lose 90% of its value this year. I'm not sure where this person is getting their information but I'm curious to find out what he has predicted in the last five years for Bitcoin. Sounds to me like he has a classic case of FOMO and wants to scare people into buying stocks over cryptocurrencies. Here's a newsflash, there is NO SAFE INVESTMENT!! There is risk that comes with everything when it comes to where to invest your money and the stock market has lost people plenty of money throughout the course of history. Now, I'm not saying not to invest in stocks. I think it's a smart idea to diversify your portfolio and have a wide range of investments ranging from stocks to land to cryptocurrencies. I'm just always amused by how these Wall Street execs are always trying to deal in fear when it comes to the cryptocurrency world. The question you should be asking yourself is this... What are THEY so scared of? I think they are scared of the people taking their money back, and taking their power back. Sure, maybe Bitcoin will pop one day. But I guarantee you this, if it does, there will be another cryptocurrency that rises to take its place. This is why you need to diversify amongst different coins besides Bitcoin.
In a previous post where i discussed the potential for Steem I said on numerous occasions that I'm not an expert when it comes to cryptocurrencies. There are plenty of people on this site that are much more qualified than me to give advice, but in my opinion I just don't see this train slowing down anytime soon. If there is a bubble I don't think it's going to "pop" this year. I read stories all the time about how Bitcoin is "crashing". Sure, it was up to $19,000 less than a month ago and now it's down to $10,000 but people aren't looking at the big picture... They seem to forget that it was at $1,000 less than a year ago. Anyone who invested when it was at $1,000 should be pretty content to sell it at $10,000 less than a year later. That doesn't sound like a crash to me, that sounds like an unbelievable return on your investment.
So where will Bitcoin go this year? Will it reach $50,000 or crash to $1,000? The truth is nobody knows for certain what will happen with Bitcoin. If it was a sure thing everyone would be unloading their retirement funds into the coin and getting rich. That's why you have to make the individual choice for yourself. Do you want to take the risk? Do you want to invest in Bitcoin and other cryptocurrencies? Or do you want to play it safe? The choice is yours but I will leave you with this thought... We've heard it a million times before... No Risk, No Reward!! This may be the single greatest chance in our lifetimes to take a shot, and I for one would rather say that I tried and failed than to not try at all.
If you are thinking about investing in cryptocurrencies you don't have to put all of your money into just Bitcoin. In my next post I will be discussing what I believe the top 5 cryptocurrencies will be for 2018 that don't include Bitcoin, Bitcoin Cash, Lite Coin, or Etherium. Stay tuned...
Stay Cool My Friends
*DISCLAIMER* - This article is not meant to serve as any investment advice and is meant purely as entertainment.
