Is Bitcoin a Studebaker or a Tulip?
Many in the mainstream financial world are convinced that Bitcoin and its fellow cryptocurrencies are a bubble phenomenon akin to the infamous Tulipmania of the 1500's in Holland. From making this analogy, they draw the conclusion that the "Bitcoin Bubble" will collapse in a spectacular and ruinous implosion, with particular vengeance on the Main Street rubes who unwittingly got in too late.
My take is a little different. I won't deny that Bitcoin has the characteristics of a bubble. I expect that there will be multiple crashes and recoveries in the next several iterations of this bubble. But I would point to the undeniable fact that tulips remain a highly lucrative and very large worldwide market to this day.
So I would rather analogize Bitcoin to a Studebaker.
In the early 20th century, Studebaker was a very successful and respected automaker. During the Fifties, it merged with Packard in an attempt to reverse declining sales. Eventually, Studebaker-Packard was unable to attract buyers, despite its long history, its design contortions and its manufacturing prowess. Today, Studebaker is no more. Along with Studebaker, a couple of hundred other automakers from the early 20th century disappeared.
Bitcoin (perhaps) and most of the 900+ other cryptocurrencies are the Studebakers of today. They will disappear, through merger, acquisition or attrition. The bubble will slowly deflate, not pop. But there will still be a huge market for the remaining cryptos, just as there is a huge market for tulips.
So the answer to the question "Is Bitcoin a Tulip or a Studebaker?" is "Yes."
