Will the Bitcoin Bubble Last- Some Lessons From History

By: Steve_Marks

Everyone is talking about bitcoin. The new cool story in the news is an interview with someone whose friend gave them ten bitcoin for a present or to pay of food or gas on a trip, who is now putting a deposit down on a house. The explosion and growth of bitcoin has caught a lot of people by surprise and has left a number of people kicking themselves they didn’t pick some up when it was considerably cheaper than its current price of around $17,000 per bitcoin. It is incredible how much it has grown and it has spawned all manner of debate about whether it is a bubble set to pop or if it will just continue to grow and grow and grow before becoming one of the most valuable possessions in the history of the world.

The world of crypto currency is rather murky with a lot of warnings from traditional analysts about getting too caught up in something that has risen and become so valuable so quickly. It has all the ingredients of a classic bubble that gets bigger and bigger before spectacularly crashing down and destroying people's hard earned investments.

Advocates however say that bitcoin is a worthwhile gamble, they say that are confident that bitcoin has been built to last. That, while it might, at some point, take a hit, it is resilient and made for the long haul. If you are looking for something more traditional to take a gamble on then why not check out these offers that give you free casino spins, for more details and bonuses go here. With the way bitcoin is going and the fact it continues to build on weak foundations, you are far better off sticking with online casinos and their free spins. Many analysts feel that people involved in Bitcoin are getting too cocky.

Bitcoin owners are now starting to do a new thing called Initial Coin Offerings are be similar to Initial Public Offerings where you bid amounts of money to access certain services or resources that are linked to bitcoin. It is an idea that has raised billions for companies who have held them and have left some comparing the Bitcoin situation to two particular historical events. One recent, the dotcom bubble and one that has its roots in the Netherlands in the 17th century where people went absolutely into overdrive to get their hands on tulips.

The period, commonly referred to as Tulip Mania, saw tulips become one of the most valuable commodities in the history of the world. Tulips became a status symbol and people began madly bidding for them as there was a suggestion that the price would continue to rise and rise up to levels where people could be rich if they just had a few tulips. There was a point, when the market peaked, when people were trading a single tulip for whole pieces of land or even a house, the market just got out of control and a bubble grew and grew. A lot of people in Holland thought that they would be able to sell the tulips on for massive profits to foreigners who would also desire the ultra rare flowers.

However as with any bubble it peaked and then began to decline quickly as people began to think the craze might not last and started to sell. This caused the price to drop and drop before it crashed and the Dutch crown had to get involved to stop a full scale depression. It was really one of the first speculative bubbles to hit Europe.

The much more recent dot-com bubble was spawned by the birth of the internet where suddenly people began to realise just how important and profitable the internet would be and how many people would use it and pay for things on it. It occured between 1997 and 2001 and saw the Nasdaq spike as people poured money into new companies. The bubble saw companies stock price explode, Qualcomm shares rose by over 2000% in 1999 with many companies stock rising by hundreds and even thousands of percentage points. When the bubble popped and market collapsed many companies came under significant pressure, some like Pets.com collapsed.

These bubbles then have a way of popping and ruining people’s businesses and investments. It seems very unlikely bitcoin will avoid going the same way as the Dutch Tulips and Pets.com but it will be very interesting to follow the news and see what happens with the world’s latest craze.

By Steve Marks

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