Why Bitcoin Is Like No Other Bubble We've Seen Before

04-03-2013 • Business Insider

We have no idea when the music will stop (it could go to $500 or $1000!) but at some point there will be a moment when it ends in tears, and people will wonder why they paid 40% more for something than what it was selling at the day before.

Here's what's really fascinating and unique about the Bitcoin boom.

This isn't the first time we've seen a bubble in something in a privately created thing that's off traditional financial markets.

For example, in the early 2000s, there was a legitimate bubble in the stuffed animals called Beanie Babies. It's not clear why suddenly people started paying through the nose through them, and why whole industries were created around them, but it happened, and then they died.

2 Comments in Response to Why Bitcoin Is Like No Other Bubble We've Seen Before

Comment by PureTrust

Entered on: 4/4/2013 4:52:11 AM

By the way, fiat currency apologists like to think of Bitcoin as a fad. Bitcoind users like to think of fiat currencies as a fad that is LONG overdue for permanent collapse.

Comment by PureTrust

Entered on: 4/4/2013 4:47:09 AM

Bitcoin tanked, dropped to as low as $110 from a high of over $150 in a 24-hour period. It basically revolved around Americans taking profit off the bubble. As of this writing, Btc is back up to almost $140. I expect that the return is due to Russians and Europeans who are feeling the REAL money bite, and want to use Bitcoin as something serious rather than just an bubble investment.

Expect a single bitcoin move up to a single ounce of gold in price within a year - at current rates of movement, might take only half a year.

There are multitudes of ways around Internet restrictions set in place in various countries. And as governments tighten their grip on the Internet, people will figure out more methods to get around the restrictions.

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