The Bubble
Everyone talks about Bitcoin being a bubble. But most do not know what a bubble is. I explain for beginners what a bubble is.
As a speculative bubble, financial bubble or bubble in the macroeconomics is a market situation in which the prices of one or more commodities (for example, commodities or food), assets (real estate and securities such as stocks or bonds) at high turnover above its intrinsic value (also: fundamental value or intrinsic value).
For me, this means that if an item or a commodity has more value than it actually is.
Why is that ?
Example:
A lighter that actually costs around 1 euro will suddenly more expensive. This is because there is probably only a limited number left. Let's say there are only 10,000,000 left on a population in Germany with 82,000,000 inhabitants. This means that every citizen can get about 0.12 pieces. So no one would receive a lighter at Fairem. But life does not work that way. People who really want to have this lighter drive up the price. Of course, since you can not scientifically prove how much value an item has for a person, of course you immediately say BUBBLE.
Bitcoin Bubble
With Bitcoin, however, there are other values
that only prove that Bitcoin is not a bubble. Once we have a market capitalization and once the exact number of coins.
Bill:
(Date: 05.01.2018)
The bill would look like that and is also exactly right mathematically.
(Market capital) / (circulation of coins) = bitcoin price
($ 280,094,777,450 USD) / (16,783,700 BTC) = $ 16,688.5 USD
In other words, assuming there is 21,000,000 BTC at once from one day to the next, the price of this market capital would fall to $ 13,337.85.
I understand Bitcoin works that way. All miners in the world are a network. Yet their function in addition to confirming transfers is also to produce bitcoin. But if all the bitcoins have been produced then what? That's why there are the fees for transfers. Because later, the owners of the mining farms earn only by the transfers.
Conclusion:
As long as people accept each other bitcoins and there is no more confidence in the Fiat currency Bitcoin is the whole crypto market for a very long time to stay alive.