10 reasons why Top Bit Cryptocurrency can not be considered a bubble

10 reasons why Top Bit Cryptocurrency can not be considered a bubble

Bitcoin (BTC) and other virtual currencies have had a major run in 2017. At the end of last year, Bitcoin reached $ 20,000 after starting the year close to $ 950 dollars. For this reason, several experts and financial analysts have defined Bitcoin and cryptocurrencies as a bubble that could explode at any time.

Some of these individuals have compared Bitcoins with bubbles like the Tulip Mania or the Dot Com. However, there are some problems and features that do not make Bitcoins a bubble.

The first comparison can be made between Bitcoin and Tulip Mania hundreds of years ago. In the Netherlands, rare varieties of fashionable tulip bulbs were very expensive. But one day, people started buying these light bulbs at a faster rate. Some people wanted to resell them and get rich overnight, but this had a sudden end.

The speculative fever around Tulips ended one day at a time. This has clearly left thousands of people devastated in the country. In no time, these flowers have become overvalued. However, Bitcoin does not work this way. The virtual currency constantly fluctuates, which means that there is constant price research rather than a Bitcoin craze.

It is also possible to compare Bitcoins with railways. In the past, when the railways began to expand all over the world, people started buying railway stock, hoping to make profits as soon as the railroad started operating. However, there have been some problems that have slowed down railways development, such as high interest rates and anti-rail protests.

However, Bitcoin is different. People entering the market know that BTC is not a specific quota and does not depend on a specific company.

Bitcoin is generally compared to the Ponzi scheme of the South Sea. This company offered a monopoly to trade with South America. Nonetheless, there was no specific information on how the company planned to do these things. In addition, the company has also disseminated misleading information in order to pump prices and take advantage of them.

In the end, the South Sea company collapsed and investors lost their money in this Ponzi scheme. Bitcoin is different. The popular virtual currency is not a Ponzi scheme. Bitcoin was created for people to avoid these scams and fake companies.

Japan, currently one of the most powerful countries in the world in economic terms, has also tested a bubble on its stock market. The Nikkei stock index rose 500%, accounting for over a third of the global stock market capitalization. But the boom stopped when the government decided to start raising rates and halting inflation. After that, the economy entered decades of low growth.

There are no governments that control the future of Bitcoin or that can destroy it. Bitcoin works independently of governments and other institutions.

The US real estate bubble began with low interest rates, easy credit and a company that was very interested in consuming at all times. Americans lived more than they could afford, and banks were approving mortgages for people who could not pay for them.

The real estate market in some areas is appreciated exponentially, leading to a real estate boom that has come to a halt with a crisis. After this situation, the global economy has entered a recession for several years.

But Bitcoin was created to avoid government fiscal and monetary policies. As a decentralized network, it works according to how the community decides. At the same time, it is also a deflationary asset, which means that it will maintain its value if demand increases.

The Mississippi bubble also hit several investors in 1720. In 1716, John Law established a bank that accepted deposits of gold and silver. Once the company has received gold, it has issued paper money. In this way, he was able to acquire The Mississippi Company an international trading company that became a monopoly supported by the government in the French colonies.

However, the number of banknotes that were issued by the company exceeded the value of gold and silver that it had in deposits. This created a bubble that ended with massive depreciation and falling prices. This situation can not happen with Bitcoin. It is impossible to create over 21 million Bitcoins, giving users certainty about the future of this currency.

There are other examples in history. For example, Bitcoin can also be compared to the Bull market in the XX. There was an economic boom caused by technological development and industrialization. US stocks reflected this boom with price increases. Ordinary people could invest in stocks, but some of them were more risky than they should. To buy more shares, people took the debt, something that ended in $ 8.5 billion debt, more than the entire sum of money in circulation.

Of course, this could not remain for a long time and the market has collapsed. After that, twelve years of recession followed.

Although Bitcoin has been adopted by individuals and regular investors, institutions are starting to pay attention in this growing market. There are some companies that are ready to invest their funds in the encrypted market, something that could provide stability and greater liquidity to Bitcoin.

Perhaps the most known bubble in recent times is linked to the boom of Dotcom. The bubble that took place in the 90s is considered one of the most damaging and destructive bubbles in history.

The Internet has started to grow and spread at very fast rates. This is something that has attracted many companies and investors to the market. This created high levels of speculation and risk taking. Several companies listed on NASDAQ skyrocketed. However, growth could not be sustained over a long period of time.

Bitcoin is attracting money from different individuals around the world and the money invested on it tends to be small rather than big. Moreover, many users do not want to sell their BTC, on the contrary, they think they have a better price in the future.

This popular virtual currency can also be compared to Rhodium. Rhodium is a rare metal that soared to $ 9,500 in 2008. In 2006, Rhodium was purchased for $ 500 dollars. But in January 2009, prices fell to $ 1,000 dollars.

There is no clear explanation of what happened to this metal. However, Rhodium was able to attract many investors who did not worry about the practical uses of the metal.

As mentioned earlier, Bitcoin may be safer because many BTC owners do not plan to sell their coins, regardless of what. This means that Bitcoin may be less vulnerable to rapid collapse.

Finally, Bitcoin can also be compared to the Kipper und Wipper case, a financial crisis that began in Europe in the 17th century. Several city-states of the Roman Empire saw their revenue grow during the Thirties' War.

The Empire has melted the coins and mixed them with cheaper metals. This is something that has been disclosed and stopped. All low-value imitations damaged the entire economy and ended with hyperinflation.

Bitcoin can not experience hyperinflation. It has a controlled supply that does not depend on any other company or government. This makes it a non-inflationary currency.

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