Bitcoin: is there a bubble?

Bitcoin: is there a bubble?

2019-11-11 • Updated

Bitcoin hovered to $3000 in recent weeks more than doubling its value since the beginning of this year. Anyone smart or lucky enough to have bought a pile of these coins in July 2010, when the price stood steadily at $0.05, would now have earned a great fortune without even stirring a finger. From day to day the digital currency’s value rises with unprecedented speed. It got a substantial boost and attracted additional investors’ attention after some governments made it a legal form of payments in their countries.  At the present moment, Bitcoin continues its seemingly endless bull rally (although with some shakeouts –here we refer to the June 12 surprise retracement), gaining additional 300 points from its recent downfall and picking convincingly above $2590. Will it rise higher? Is there a bubble? These are the questions most traders ask nowadays.

There are tons of articles and personal opinions labeling Bitcoin’s current sustainable surge as being in a bubble. The main evidence for a bubble lies at least on the ease and on the speed with which people are making money off of the recent Bitcoin’s swing. For some analysts, easy profits are the first indication of the lack of price stability in the longer term.

Other experts thoughtfully explicate Bitcoin’s gains and say that there is no bubble in effect. They site at least three reasons in Bitcoin’s defense. The first one is that its decentralization. Bitcoin is immune to any sort of manipulations; there is no special entity that would authorize the issuance of additional coins or that would take control of Bitcoin’s value. The second reason is the Bitcoin’s limited supply – there only 21 million of cryptocurrencies in circulation. The fact that all Bitcoin transactions are logged in the Blockchain stems the risks of fraud. So, Bitcoin’s transactions are secure; this makes the digital currency even more valuable.

The journalists from the Economist took nobody’s side in this big analytical dispute and dubbed the Bitcoin’s recent appreciation a healthy bubble (a bubble but with probably good consequences for investors).

Overall, most of the strategists and billionaire investors remain optimistic towards cryptocurrencies. Goldman Sachs analysts have recently said that in the longer term Bitcoin after a small rollback will bounce to much higher levels in the area between $3212 and $3915. They recommend their clients to arm themselves with lots of patience before gaining eminent profits from future Bitcoin’s rise.  

And you, do you believe in the further Bitcoin’s appreciation?

Similar

Why is oil's rally in danger?
Why is oil's rally in danger?

Yes, oil prices are burning right now, and inflation is getting hotter along with it worldwide. However, the oil's bullish momentum is under threat.

How Will Gas Supply Reduce Affect Eurozone?
How Will Gas Supply Reduce Affect Eurozone?

What is happening? The Russian president's announcement that countries "unfriendly" to Moscow must pay for gas deliveries with rubles shows that he's willing to use energy as a weapon in the Ukraine war…

Latest news

What To Trade On May 23 - 27?
What To Trade On May 23 - 27?

Last week blew traders' minds!  The US dollar dropped for the first time in seven weeks after Jerome Powell's speech on Tuesday…

Can a recession be avoided? 
Can a recession be avoided? 

The pandemic continues hurting economic activity in China, the war in Ukraine is hitting the entire European economy, and the Fed's efforts to control inflation threaten to trigger a recession. 

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera