https://finance.yahoo.com/news/cryptocurrency-market-cracks-300-billion-060022374.html?utm_content=buffera3451&utm_medium=social&utm_source=facebook.com&utm_campaign=yahoofinance
There has been much talk recently about the Bitcoin Movement, and further cryptocurrency as a whole. Bitcoin has skyrocketed over 1000% in the past year, breaking norms that we typically see in the stock market. The difference here is, bitcoin is not the same as a typical stock. As the stock market is centered around banks, businesses, and federal regulations, the future of bitcoin turns to the people who mine (obtain it) it and the people who buy and sell it day in and day out. A popular term that is used is that bitcoin is in a 'bubble'. We hear this term spoken about a lot revolving around the stock market. Again as mentioned early, the bitcoin market does not behave anything like a typical stock market, so why would we think that bitcoin is in a bubble? This is because of the rapid growth it has seen. If we look at the past year, we can see that everytime the 'bubble' was said to have been popped, it was followed by more rapid growth shortly after. Only time will tell.
Bitcoin may be a bubble, due to the fact that you cannot purchase a lot of goods with Bitcoin. If people would perceive that bitcoin will not be able to purchase anything in the future, the value of Bitcoin would decrease. This would be a popping of the bubble.
ReplyDeleteWith nothing truly backing the currency it is bound to burst, and with its exponential growth, it looks like it will burst eventually. Much like the housing market, there was too much bad in the market to balance the assets. Which is how bitcoin will eventually crash.
ReplyDeleteI agree with both Nick and Nevin. If people believe that in the future many purchases will not be available through method of Bitcoin, the bubble is going to pop. I personally think it is going to take a bit of time for Bitcoin to become popular because I don't think people will trust it just yet.
ReplyDeleteInteresting outlook, most economists say that this is a bubble and it is interesting that when it was looking like the bubble was going to "pop" it just continued to grow. In my opinion I feel like there has to be some type of ceiling. The growth is like nothing we have seen before. I like the idea that it may not be a bubble but in my opinion I don't think it can sustain this growth
ReplyDeleteErin, Nevin, and Nick all make great points however I tend to disagree with them. People are investing in it like crazy right now knowing it doesnt have anything backing the currency and that it currently cant purchase anything. People are looking to make profit and that is something that Bitcoin has been doing for investors. I am very eager too see what Bitcoin turns out to be.
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