Will the Bitcoin Cryptocurrency really be a Bubble?
If it is understood that a bubble from the economic point of view refers to a rise, out of normal and for a long time, the value of the cryptocurrency, so that this price is quite far from its real value. This rise in price is usually due to the speculation. In this way, we talk about a speculative bubble when large investors create an artificial demand, telling the market that said cryptocurrency will continue to rise in price, which causes small investors to enter the game by inflating the bubble, until it is assured, then they decide to sell at a high price flooding the market, which causes the price to fall, and creates panic in the small investors who decide to sell, entering into a downward spiral of price.
In this sense, financial experts point out that Bitcoin is a speculative investment that is paying spectacular returns. Remembering that Bitcoin closed the year 2017 with a rise that was about to reach $ 20,000, then came the decline; in the first months of the year 2018 of alarming form, and at present it is again in rise. Volatility that is considered a speculative bubble, by some financial and economic experts.
In this regard, a panel of opinions from various experts will be presented; Among them are the People’s Daily, the official newspaper of the Chinese Communist Party and the largest group of newspapers in China, who recently published an article in which Bitcoin is referred to as a bubble, as did Jamie Dimon, CEO of JP Morgan. Taking into account the volatility of its price and the surprising growth it has had, in turn, the People’s Daily affirms that it is a fact that the cryptocurrency is a bubble because it was created through a combination of speculation, mystery and decentralization.
For his part, Edmundo Guillén Patiño, economic analyst and market researcher at Grupo Expansión, researcher at the Center for Economic and Budgetary Research (CIEP) and professor at the Autonomous University of Mexico City (UACM). He points out that Bitcoin has social support and even though it may be a bubble that explodes, it is still socially accepted by the community that created it.
In the same vein, the director of Macroeconomics and Financial Markets of CaixaBank Research, Oriol Aspachs, considers that cryptocurrencies, at present, “are more like a bubble than a promising element”, since cryptocurrency has the benefit of anonymity and ease of transaction, but also present problems. In turn, Gonzalo Bernardos, Analyst of Economy for You warns that the Bitcoin is a great speculative bubble, inasmuch as its current value is only based on the high confidence of the investors, a characteristic that today has and tomorrow can evaporate.
Likewise, the Nobel prize Robert Shiller, Nobel Prize in Economy in 2013, says that the virtual currency “It is an experiment that attracts a lot of investors because it can be a great invention, but also a great failure”.
On the other hand, Víctor Escudero, worker of S21sec, a company completely dedicated to Cybersecurity, points out that Bitcoin is a good investment, and denies that it is a bubble because “when it occurs, although the price rise process is similar, the fall is so strong, almost flush, that it would not rise again. In contrast, bitcoin has been constantly inflated and deflated. “In the same regard, Ronnie Mas, of Standpoint, denies that Bitcoin is a speculative bubble of virtual currencies and predicts that, in 2018, the price of each bitcoin will surpass 11.ooo dollars and that, in 2027, the price will surpass $ 50,000 barrier.
Although, the Bitcoin has had a behavior of ups and downs, still has the backing of a solid technological platform as has been the Blockchain and the confidence of its investors, at the same time, all investments are risky, therefore, you can win or lose money, but what can be sure is that the trends of the financial and economic world are oriented towards the use of the Blockchain platform and Bitcoin that offers a multitude of useful features and properties, which are far from disappearing, on the contrary, it has come to stay and expand.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.