Oct 27, · Bitcoin is approaching levels not seen since just after the burst of the cryptocurrency market bubble almost three years ago. The biggest digital token by market value rose as much as . Nov 22, · Are the pixie fairies sprinkling gold dust on bitcoin’s market again? By the looks of things, you might think so. Like in the bubble days of , the price of bitcoin is headed ever upward. On Wednesday morning, it surpassed $18, — a number not seen since December when bitcoin, at its all-time peak, scratched $20, While Market bubble vs Bitcoin is still the dominant cryptocurrency, in it’s axerophthol share of the whole crypto-market chop-chop fell from 90 to around 40 percent, and engineering science sits around 50% as of September Bitcoin is money, but to buy Bitcoins, you need to send money to someone else. The writer late the business.
Market bubble bitcoinAngry BearIs Bitcoin A Bubble? | Angry Bear
Some are saying all this is due to a fear that the US dollar will collapse. Maybe, although I do not know. It is not screamingly obvious why that might happen now more than at other times. Pro Trumpers might push this, but they were pushing the stock market would collapse if Biden won.
And, heck, the announcement of allowing transition to Biden sent the Dow over 30, for the first time ever, not exactly a collapse, although Trumpers say this is all due to the vaccine hopes, and all that is due to Trump. The reason is that a number of entities out there have recently announced that they will accept payments in bitcoin, with this not likely to be reversed. This suggests that it is not gong to collapse and disappear and also that its use as a medium of exchange may continue to spread.
Of coures, technically speaking all fiat currencies that are not backed by a commodity are bubbles. They only have positive value because people think other people think they will be accepted, a sort of giant mass hallucination. But as long as the belief holds, it works.
These are stable bubbles, not the sort that zoom up and then crash, which is what a lot of people mean when they a particular price movement is a bubble and this may happen still with btc. This is the argument of the original overlapping generations models due to Allais and Samuelson, that fiat currencies are essentially stable bubbles that can continue because they can passed on to future generations.
Of course fiat currencies, like the USD, have their governments supporting them in a variety of ways, if not with a specific commodity, and bitcoins and other cryptocurrencies do not. That certainly makes the cryptos a lot shakier than national fiat currencies. But maybe they, or at least bitcoin, will now have a higher floor for its price than was the case a year ago or so. What would the warning signs be that the dollar is about to collapse? That US interest rates cling to historical lows?
That people are still buying treasuries? How are these facts omens of an imminent dollar collapse? I would suggest that the failure of cryptos is that they are primarily a speculative tool. The object, when they were created was certainly not that.
But then the same could be said about the stock market…so where do we go from there, The issues for cryptos are several, first is transaction costs, but liquidity too since so many bitcoins are still owned by a very small number of people maybe.
With too much capital and not enough income, investment opportunities are scarce. One would expect markets in essentially worthless products to rotate through booms and busts. If one is careful using VPNs and other anonymizing technologies, it can even be used for illicit money transfers. For now, at least, this includes moving money out of China, though this may not be true forever.
Bitcoin, as structured, cannot be used directly for exchange. At maybe ten transactions per second, if it were adopted worldwide, each of six billion people would have to wait over 18 years for his or her transaction to go through.
Bitcoin can be used as backing for a currency much as gold was. Like fiat currencies and gold, the base price of bitcoin can up and down. The problem with bitcoin is that while some companies might accept it, like Tim Horton bucks in Canada, no government currently forces people to accept it.
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