Bitcoin is in a bubble, and here’s how it’s going to crash

Bitcoin is in a bubble, and here’s how it’s going to crash

Though Bitcoin has been able to enjoy a fair number of upward trending periods since its inception, experts now predict that the cryptocurrency giant may be close to an unprecedented bubble burst

The reasons behind the alleged imminence of a Bitcoin bubble burst can be related to a number of factors, from its feasibility as a manner of exchange to its role of a potential storehouse of value. Whatever the most impactful shortcoming of Bitcoin may be, there isn’t any denying the fact that preparing for said bubble burst is a top-level priority for just about everyone in the market.

Though Bitcoin has seen no shortage of opposition from professionals in the financial landscape such as JP Morgan CEO Jamie Dimon, it is just about unanimous that the cryptocurrency will remain a highly transformative element of the market as we know it. Though likely motivated by at least a marginal amount of self-interest, CEOs such as Dimon have right been on the money in their interpretation of Bitcoin’s figurative value being more speculative than concrete.

Investors Still Not Sold on BitCoin

Because the existence of cryptocurrency opens up the floor for so much speculation, it can be very easy for traders and investors to become comfortable with the notion of its value figuratively growing at an infinite rate.

Though there may not yet be grounds to completely shut down the wildly optimistic expectations for transformational technology to grow exponentially, the speculative praises surrounding these cryptocurrencies also pose a significant level of risk.

What experts tend to project is a more favorable outcome for those who adopt a crypto currency such as Bitcoin earlier than later. Naturally, anyone who learns about Bitcoin today would not be considered an early adopter in any sense whatsover.

The most accurate pattern that can be roughly drawn to project the feasibility of any cryptocurrency as a stable investment is to give a more favorable prognosis for those who come in earlier than anyone who starts learning about it after it’s already started to make waves.

By the time that the speculative projections of early adopters have resonated and echoed far enough for those who first hear about it due to the most positive isolated results to validate those speculations, they will most likely be walking into a situation where they believe that they can replicate a certain degree of success that simply isn’t feasible.

BitCoin Isn’t the Only Bubble

Historically significant bubble bursting events such as the South Sea Bubble and Mississippi Scheme have consistently demonstrated the great level of risk necessitated by heavy investment into speculative projections.

Apart from the purely technical reasons that many have projected the Bitcoin bubble burst to be caused by, one of the predominant theories has related to a matter of optimism outweighing rationality. Some have argued that the sensationalism caused by Bitcoin as a concept at the time of its inception may have simply been too distracting for some to carry out a rational analysis of its prospects when faced with its unprecedented existence.

Now that the dust has settled and the world has come to look at cryptocurrency as more of an objective reality than an abstract idea, the optimistic expectations that abounded when cryptocurrency was still in its fledgling state must now be balanced out with more grounded and realistically grounded assessments.

Bitcoin has a daily volatility rate as high as 10 percent on average, uncertain international convertibility and questionable correlation with illicit activities carried out by cyber criminals. Time will tell whether or not rising value of bitcoin alone can really predict enough of a positive outcome for those who weren’t among the earliest to have invested in it.

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