5 Reasons Why Bitcoin is a Bubble
From casual conversations with some people, I have noticed that a few have not yet understood bitcoin to be a bubble. This is why I decided to put together a fun little Top 5 of reasons, why I think bitcoin is in fact a bubble:
5. There are better alternatives
The reason that bitcoin is so popular, is because it was the first cryptocurrency. With many alternatives available that are better in different aspects, it's just a matter of time until people, who want to actually use it for it's purpose (mainly buying drugs on the darknet or moving money out of China), will move onto other cryptocurrencies, that offer much quicker transactions with lower fees. Once those people leave, bitcoin will loose any real value it may still have.
4. It's a Bull Market
People are buying, because the value is rising, causing the value to rise, causing more people to buy ... , while people who already own bitcoins do not want to sell, since there is a great prospect of the value increasing. This immense demand, paired with the low supply causes the value to shoot up exponentially, shooting way past anything that is reasonable. This is a gigantic readjustment, just waiting to happen.
3. It's a Ponzi!
When everyone and their grandma have finally bought into bitcoin and the value increase starts slowing down, the people who bought in early will start to cash in their bitcoins. The value will slowly start to fall, everyone will panic-sell and the whole thing will come crashing down. The early ones will get out with a nice profits, the late ones will loose everything they put in.
2. Emotion
Just pay attention to all the reactions you see on the internet, of people who bought into bitcoin, when they see someone point out that it's a bubble. The heathens, who don't believe in bitcoin are instantly met with immense amounts of hate and insults, for they must be stupid and resentful, because they didn't buy! What this really tells us, is that bitcoin "investors" have reached the point, where they stopped thinking with their brains and started to act on their emotions. People who have a bit of experience with investing know, that once people start buying based on emotions, there won't be a good end to the affair.
1. Bitcoins are worthless
In reality bitcoins are worthless. They don't do what they are intended to do, because they are a terrible currency. Long transaction times, high transaction fees, extreme volatility, extreme deflation and so on. They are a pure speculative tool for people to get rich quick at this point. So once they readjust, their value will be close to zero.
Congratulations! You've made it to the end of the post! If you are feeling a little bit angry or irritated now, it's completely fine! You should try to think over your opinion rationally and logically. It is entirely possible, that I am completely wrong on bitcoin and that it won't ever crash and I would appreciate hearing reasonable arguments from the other side. If you feel discouraged from bitcoin, here's a little post on why I think it may still be a good idea to buy. Just make sure never to invest more than you can afford to loose!