Forex Market News Today
  • Home
  • News
  • LiveHourly
  • Markets
  • Stock
  • Business
  • Economy
  • World
  • Politics
  • Energy
  • exchange
  • companies
No Result
View All Result
Forex Market News Today
Home Economy

No, Bitcoin Is Not in a Bubble

2 months ago
in Economy
3 min read
No, Bitcoin Is Not in a Bubble
Share on FacebookShare on Twitter


To think that such a festive concept, one that evokes both sophistication and childlike wonder, could become so financially charged …

Last week, Bank of America Securities chief investment strategist Michael Hartnett said in a note that bitcoin looks like “the mother of all bubbles.”

Harnett seems to be using the strength and speed of bitcoin’s price rise as the base for his diagnosis, as if that is the main feature of a financial bubble. It isn’t.

Continuing the misuse of the word, in a note quoted on Bloomberg this week, investment management firm Man Group said: “Every time a bitcoin bubble bursts, another grows back to replace it … This very frequency makes the bitcoin narrative somewhat atypical relative to the great bubbles of the past.”

This is less irritating in that Man Group recognizes that bitcoin is “atypical” – but it also seems to believe that bitcoin is a bubble. It’s not.

Words matter

To see why, let’s pull out our financial dictionaries:  

Investopedia: “During a bubble, assets typically trade at a price, or within a price range, that greatly exceeds the asset’s intrinsic value (the price does not align with the fundamentals of the asset).”

Nasdaq: “A market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset.”

Wikipedia: “A situation in which asset prices appear to be based on implausible or inconsistent views about the future. It could also be described as [an asset that trades] at a price or price range that strongly exceeds the asset’s intrinsic value.”

Do you see the common thread? An asset is in a bubble when its price increase is unrelated to its intrinsic or fundamental value.

What is bitcoin’s intrinsic value? Nobody yet knows. We’re looking at a still young technology that is evolving alongside the demand for it. The technology’s future use cases are still unclear, as is its place in the financial ecosystem. And bitcoin’s unique investment characteristics and unfamiliar metrics make it impossible to apply traditional valuation techniques. Many have opinions as to its fundamental value, but you only need to look at the wide range to realize they are based on unestablished theories and untested logic.

So, anyone saying that bitcoin is in a “bubble” is making a judgement call on its intrinsic value. But they never (not that I’ve seen, anyway) share their calculations or even reveal the number that they’re thinking of.

Social concepts

Maybe these analysts and commentators are using the term “bubble” in the social sense?

Economist Robert Schiller defines a speculative bubble as a “social epidemic whose contagion is mediated by price movements.” Those of us that spend time on Twitter or YouTube may be nodding in recognition. But Schiller specifies “epidemic” (an unfortunate metaphor in 2020-21), which implies mainstream participation. The cacophony of bitcoin maximalists and altcoin…



Go to the news source: No, Bitcoin Is Not in a Bubble

Tags: Bitcoinbubble
Previous Post

The top five things this leading economist thinks will happen in 2021

Next Post

Poultry Probiotic Ingredients Market worth $120 million by 2026, Says GMI

Related Posts

February job growth surges above expectations as coronavirus recovery picks up s…
Economy

February job growth surges above expectations as coronavirus recovery picks up s…

by Forex News
March 5, 2021
0

Yardeni Research President Ed Yardeni and Evercore ISI Chairman Ed Hyman provide insight into economic growth, today’s markets and...

Read more
Fears rise among bond investors as Buffett warns on outlook
Economy

Fears rise among bond investors as Buffett warns on outlook

by Forex News
March 5, 2021
0

“Bonds are not the place to be these days,” Warren Buffett, the Berkshire Hathaway chief told shareholders in his...

Read more
US job growth likely rose in February in rebound from slump
Economy

US job growth likely rose in February in rebound from slump

by Forex News
March 5, 2021
0

Yardeni Research President Ed Yardeni and Evercore ISI Chairman Ed Hyman provide insight into economic growth, today’s markets and...

Read more
Too much stimulus in the U.S. may bring ‘imported inflation’ to China, economist…
Economy

Too much stimulus in the U.S. may bring ‘imported inflation’ to China, economist…

by Forex News
March 5, 2021
0

BEIJING — As the U.S. pumps trillions of dollars into its economy in the wake of the coronavirus pandemic,...

Read more
China Sets Economic Growth Target of ‘Over 6 Percent’ This Year
Economy

China Sets Economic Growth Target of ‘Over 6 Percent’ This Year

by Forex News
March 5, 2021
0

BEIJING — One year after China was battered by the coronavirus, the government promised on Friday a robust return...

Read more
China announces ‘over 6%’ economic growth target, tech plans
Economy

China announces ‘over 6%’ economic growth target, tech plans

by Forex News
March 5, 2021
0

BEIJING (AP) — China’s No. 2 leader announced a healthy economic growth target Friday and plans to make this...

Read more
Crypto industry to Biden: ‘Criminals we are not’
Economy

Crypto industry to Biden: ‘Criminals we are not’

by Forex News
March 5, 2021
0

Sources tell FOX Business’ Charlie Gasparino that the crypto industry is bracing for increased regulations as digital currency gains...

Read more
Gasoline prices may hit highest levels since 2014 as OPEC+ keeps oil output cuts…
Economy

Gasoline prices may hit highest levels since 2014 as OPEC+ keeps oil output cuts…

by Forex News
March 5, 2021
0

Gasoline prices at the pump may climb past $3 a gallon by Memorial Day, following a decision by the...

Read more
ERCOT overcharged for electricity in Texas by $16 billion during freeze
Economy

ERCOT overcharged for electricity in Texas by $16 billion during freeze

by Forex News
March 4, 2021
0

The Electric Reliability Council of Texas made a $16 billion error in pricing during the week of the winter...

Read more
Payroll gains likely accelerated as restrictions eased
Economy

Payroll gains likely accelerated as restrictions eased

by Forex News
March 4, 2021
0

The U.S. economy likely added back the most jobs since November last month, as easing COVID-19 case counts and...

Read more
Next Post
Poultry Probiotic Ingredients Market worth $120 million by 2026, Says GMI

Poultry Probiotic Ingredients Market worth $120 million by 2026, Says GMI

Subscribe
Login
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Latest Forex News

Pre-open session: Sensex jumps 380 points, Nifty nears 13,700; all eyes on Budge…

Pre-open session: Sensex jumps 380 points, Nifty nears 13,700; all eyes on Budge…

1 month ago
Live Foreign Currency Exchange Rates

Britons set for a post-Covid spending binge, says Bank chief | Economic growth (…

4 weeks ago
The Margin: SpaceX set to become first private company to put U.S. astronauts in…

The Margin: SpaceX and NASA hope weather permits Saturday launch — watch it live…

3 months ago
Saudi Arabia Set to Raise Oil Output Amid Recovery in Prices

Saudi Arabia Set to Raise Oil Output Amid Recovery in Prices

2 weeks ago

Today Market News

Father arrested in India for beheading his 17-year-old daughter
World

Father arrested in India for beheading his 17-year-old daughter

March 5, 2021
February US Nonfarm Payrolls w/ Christopher Vecchio, CFA
Live

February US Nonfarm Payrolls w/ Christopher Vecchio, CFA

March 5, 2021
February job growth surges above expectations as coronavirus recovery picks up s…
Economy

February job growth surges above expectations as coronavirus recovery picks up s…

March 5, 2021
Live Foreign Currency Exchange Rates
Politics

US cases rise, deaths fall; California; Maryland; Texas

March 5, 2021
Dow Jones Futures Rise After Fed Chief Powell Triggers Market Break; What You Sh…
Stock

Dow Jones Futures Rise After Fed Chief Powell Triggers Market Break; What You Sh…

March 5, 2021
Novel Method to Measure Offshore Methane Emissions
Energy

Novel Method to Measure Offshore Methane Emissions

March 5, 2021
  • Contact Us
  • Terms of Use
  • Privacy Policy
  • DMCA
  • CCPA

© 2020 Siteofforex.com

No Result
View All Result
  • Home
  • News
  • Live
  • Markets
  • Stock
  • Business
  • Economy
  • World
  • Politics
  • Energy
  • exchange
  • companies

© 2020 Siteofforex.com

wpDiscuz