Don’t blow with bitcoin bubble

courtesy:bitcoin.org

THEME:

To make readers cautious about investing in bitcoin.

Fever is on. Hopes are high. People are investing in bitcoin to turn thousands into millions and millions into billions. Perhaps time has come for transition to new decentralized electronic currencies based on revolutionary blockchain technology. Cryptocurrencies like bitcoin have started a new era of economic freedom due to inherit anonymity and decentralization in system. Bitcoin price has already gone up more than four time in last six months.

stop…stop…stop…

more than four time in just six months!!!

Lets see price chart of bitcoin for past 3 years.

courtesy: bitcoincharts.com

Bitcoin was growing slowly and steadily from almost two and half years from January, 15 to April, 17. But May, 17 onward, bitcoin skyrocketed from $1000 to almost touching $5000 in September, 17. Certainly a question is needed to be asked. What gave investors so much confidence in bitcoin in past few months? Commonly, one can think of awareness and confidence in bitcoin. Other reasons could be loss of interest in other traditional investments like stocks, commodity, loans, venture capital etc. Clearly six months period are not a large enough to predict investors confidence in bitcoin for years to come. It will be very early to even say that bitcoin has bitcoin has found a bottom at $2000 or $2500. Perhaps we are experiencing an bitcoin bubble as experienced in late 2013.

Following is the price chart of bitcoin from January, 13 to December, 15.

courtesy:bitcoincharts.com

Bitcoin experienced a major bubble in late 2013, when bitcoin prices jumped above $1000 in December, 2013 then crashed for almost a year.