Why Bitcoin’s Price Isn’t A Bubble?
Naeem Aslam, a Forbes contributor and a veteran trader, takes on the consensus in the investment community that bitcoin’s price is a big bubble waiting to crash. The perception exists in the investment community largely on account of the number of bubbles that have come and gone since its birth, Aslam noted. These include the tech crash that saw the NASDAQ index fall 78% in 30 months ending in 2002.
Aslam said the NASDAQ index not only recovered from the 2002 crash, but has gained 26% since recovering its losses, meaning it is up 486% over the crash’s low point.
As for bitcoin, each country is interested in cryptocurrency, meaning that at this time many countries are already convinced of the attributes of cryptocurrency, this is a good sign.
What you can not forget is that bitcoin is different, it is very safe. Aslam said the global audience for bitcoin today is larger than for the world’s largest stock market, the U.S. stock market.
Other factors include the fact that there is a limited supply of bitcoin and that it can not be counterfeit.
What is more significant, bitcoin is “perfect for the new technological world,” he said. Consumers are shopping more on the Internet. Consumers are switching from fiat currency to bitcoin, he noted, and this further builds the demand for bitcoin.
Now, what about volatility? Aslam does not rule out bitcoin volatility. Speculators are always moving in and out of it, which causes volatility. But recent action on bitcoin price hikes indicates that activity is largely due to capital inflows from Japan and Korea.
Aslam points out other developments that address the volatility issue. The New York Agreement in May resolved to address bitcoin’s political governance. Australia is also planning to regulate cryptocurrency exchanges, which will provide more transparency and allocate more authority to the Australian Financial Intelligence Agency.
Likewise, here will be more products such as exchange traded funds for bitcoin, which are likely to find strong demand and will also help stabilize the price. Bitcoin has risen nearly $ 645 this month as it approaches the $ 5,000 mark.
As of August 22, the first SegWit transaction is scheduled. If it succeeds, it will improve confidence and spur more bitcoin investment.On Nov. 22, a bitcoin hard fork is planned that will double the bitcoin block size.
In summary, if confidence in governance within the ecosystem, bitcoin will continue its rise in price, therefore investors can be calm for the moments. New announcements are expected.
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