Is the Bitcoin bubble bursting?


 Allianz Global Investors have warned that the Bitcoin Bubble is about to burst.  The growth in the Bitcoin price is nothing short of incredible and even though the price has tumbled right down to $7750 at the time of this publication. The percentage growth was approximately 730% against the USD at the current price, and close to 2000% growth at the higher recorded price of $19,435.

 

 

“So is this the end of the hype about Bitcoin as the future of global currencies? Probably not yet, since speculation in Bitcoin and similar instruments appears set to continue for some time. Yet from our perspective, Bitcoin has serious flaws: its trajectory resembles a textbook case of a financial-market bubble, and it is lacking several key qualities that would qualify it as a currency.” stated Stefan Hofrichter, head of global economics and strategy.  Read more

 

 

The key takeaways from the Allianz Global Investors report are as follows:-

 

 

  • Between December 2017 and February 2018, bitcoin’s price fell by around half, but this probably isn’t the end of the bitcoin bubble
  • Bitcoin meets all of the essential criteria for any asset-class bubble, including overtrading, a lack of regulation and the potential for swindles
  • Bitcoin has no intrinsic value: it is a claim on nobody – unlike sovereign bonds, equities or paper money – and doesn’t generate any income
  • We don’t view bitcoin as a currency due to its high transaction costs, tremendous price volatility and inability to be a true store of value
  • Despite our concerns about bitcoin, its underlying blockchain technology has merit – particularly its ability to reduce financial-transaction costs

 

 

 

Many experts are weighing in on the Bitcoin price.  In 2017, there was much discussion regarding Bitcoin as a bubble.  However, there are a number of bullish predictions for example, Bitcoin investor, Tom Lee Bitcoin predicts Bitcoin will be $ 25,000 by the end of 2018 and will rise to $ 125000 by 2022.  In November 2017, John McAfee raised his prediction to $ 1 million by 2020.

 

Hedge fund manager Mike Novogratz says “Bitcoin is going to be the Biggest Bubble of our Lifetime”

 

What are your opinions?  Is Bitcoin unstoppable?

 
 

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