Is Cryptocurrency in a Bubble? (Spoiler: Probably Not!)
— Team VVToken
November 13, 2017
When the price of something soars as much as Bitcoin has, it’s easy to see why the word bubble might be thrown around. It’s not just Bitcoin though, practically every major altcoin has seen some type of spike in the past few months (or in some cases, years.) But what exactly is a bubble, and what evidence is there to prove that cryptocurrency is a bubble market just waiting to burst? Well, the answer is not as evident as you might think.
What’s a Bubble?
You can think of a bubble as an inflated product or commodity that’s about to get too big for itself. The extreme price hike is usually caused by product hype as opposed to real value or merit. In other words, the value is based on public perception and not tangible benefits. In this case, those who buy may simply be doing so with the intent to sell when it reaches a certain price. Once that happens, the desperation to get rid of it causes the price to substantially drop.
The Market Today
Cryptocurrency has had a wild ride over the past few years, as new miners, developers, and entrepreneurs come to the table. Some people believe in the product and its powers, while others simply know that it’s recently hit all-time highs. There’s no doubt that there are some people investing in cryptocoins simply because it’s in a very in-style thing to do right now. The more press it gets, the more people jump on the boat to buy without knowing what it is. This is often a sign of a bubble, but the story doesn’t stop there. In VVToken’s opinion, the real truth is that virtual currency is valuable; it’s not just based on market hype. The speculation that it’s a bubble is generally done by people who don’t see its inherent opportunity — but it’s there if you know where to look.
Delusion and Reality
It’s people who assign value to virtual currency, and it’s not a fantasy that this could start happening en masse soon. People are already used to dealing with virtual transactions. As it is, between their phone, tablet, and laptop — it’s rare for many to even carry cash anymore. Virtual currency is already making payments to the next level, and it can make financial transactions more secure . It’s why financial experts have been known to say that this price spike is just the beginning rather than the end. The skeptical people out there aren’t wrong to worry about everything from regulations to widespread adoption, but it would behoove them to remember that these were exactly the same concerns voiced when the Internet debuted on the market. As the public learns more about what virtual currency can offer them, their collective voice will demand a smarter way to conduct their financial affairs.
The Long Road
Bitcoin (and by extension cryptocurrency) has had a somewhat spotty past, especially considering it has been used for some extremely unsettling reasons. But the market has managed to rally again and again, garnering interest from investors because of its incredible features. The underlying blockchain technology is now widely used by major banks and even small businesses. It speeds up transactions to seconds as opposed to days, it cuts down on the likelihood of financial fraud and identity theft, and it subverts the banks and their greedy tactics. Plus, there are still a lot of people who have never even heard of virtual currency! With so many people out there to discover what an altcoin can do, it doesn’t seem likely that the market is going to crash anytime soon.
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