Bitcoin has already broken through $10,000 on cryptocurrency exchange platform CEX IO, however most other exchanges have yet to break through this major psychological barrier.
The price of Bitcoin has gone parabolic in recent days however as it strode ever closer to the $10k mark it’s momentum has dropped as resistance has been hit. However most agree that within days or possibly hours this $10k barrier will be broken across all exchanges. With the recent increases in value it comes as no surprise that the subject of bubbles has also began to circulate. For example:
The bitcoin cryptocurrency is a bubble which will burst, but the underlying blockchain technology will have some useful applications, according to a director at Harbourvest Private Equity – Harbourvest Private Equity
“This has felt like the latest, maddest speculative bubble, a tulip fever for the hi-tech era”, Rory Cellan-Jones, BBC
There is an endless list of traditionalists within the financial sector who will continue to naysay Bitcoin. Lets not forget Bitcoin has died more times than a cat according to mainstream news, year after year we read the same articles discussing the death of Bitcoin. Yet here we still are!
The comparison to the Tulip bubble is nonsensical as Tulips held no value as such, they held no more value than fiat currency. However Bitcoin offers value in the form of how it’s borderless transactional capability. Try selling a tulip bulb to someone 6000 miles away within 24 hours, it’s not an easy feat. Try making online payments with a Tulip bulb, it’s really hard.
Another point worth mentioning is that in the height of the Tulip craze, one tulip was worth 40x the average persons wage at that point in history. So putting this in perspective this would mean Bitcoin would need to be valued at around $2million to match the Tulip bubble frenzy.
Lets also take a look at a logarithmic graph for Bitcoin which shows percentage gains rather than valuation gains:
As you can see where we are now is actually far less on a bubble as the price graphs would indicate, in fact we are just in the beginning of what appears to be a major growth period. Of course all this is speculative guesswork. As there is nothing we can compare this unique market too it is a little like predicting the next move of snake or other highly volatile creature.