My personal theory is that cryptocurrency is not the bubble, but rather the needle that will burst the fiat money bubble. Trough history we have always had an easy way to attribute value to things without it. Those who believe that fiat money is the only true way often attribute their opinion to the fact that fiat money is substainsable because of its centralized nature and its history of being used as a represantation of value
Right now it is (for the most part, at least)
Bitcoin and other cryptocurrencies fit well into the definition of a financial bubble. I could even claim that Bitcoin is a sort of tulipomania. Just like tulips, bitcoins are useful for some purpose, namely, for transferring value around the world while completely bypassing centralized (real controlled) entities like banks, but Bitcoin current price is by no means determined by this utility. Most of Bitcoin value today comes from sheer speculation. Whether Bitcoin bubble is going to pop eventually or its real use as a currency will finally match its use as a speculative vehicle is not clear as of yet
Good answer, always fun to hear others opinion. =)
I agree with you, bitcoin does fit well in the definition of a bubble as it is completly speculative. But what about fiat money? We have seen again and again trough history how fiat money has just blew up in a bubble, happend with the german mark after world war 2 and then the zimbabwean dollar. Does this not show that fiat moneys value also comes trough speculation? the only diffrence being that it can much more easily be controlled, manipulated and abused to hurt individuals, while cryptocurrencies also are speculative in there value, it does have the security fiat-money does not against corruption and protecting the individual.
Perhaps you could call fiat and crypto money for bubbles, with the crypto having one extra layer of soap as it is decentralized.
You did change my opinion a bit tough, i do agree with you that cryptocurrency is in a bubble, as you said the definition fits perfetcly, so thanks for contributting to my wisdom , i did write a bit blatantly that cryptos arent bubbles but that was a misrepresantion of my opinion haha, thanks:)
I believe the speculation that money needs a centralized controlling force IS part of the bubble and that is what is ready to burst, as peoples confidence in government is steadily declining(i believe).