Hi fellow steemers and crypto enthusiasts!! Today I decided to share my perspective on a different topic today and thats the question of is bitcoin & ethereum in a bubble??
At this moment Bitcoin and Ethereum both are sitting at or close to their all-time highs as we speak and look like they are in breakout mode. Lets take a look at both charts and see what kind of story they show us visually.
Wow they both look like they have risen substantially in a short period of time which may show that we would be entering an asset/crypto bubble but lets ask ourselves another question. From experience when an asset bubble/over valuation of any asset is occurring everyone is talking about it. Probably majority of almost everyone you know from family, co-workers and friends are all talking about it, but for myself i don't know anyone talking about the rise in prices of bitcoin or cryptocurrencies, except i noticed the media is just beginning to cover it which would be a small warning sign.
From experience, asset bubble prices will and can always rise higher than most people can predict, so this could be just the beginning or middle stage of a bubble. An example would be Canada's real estate bubble, nobody can predict when it will end or how high our real estate prices will go, but of course we all know good things always come to an end and when prices of anything rises too fast in a short period of time will always lead to price declines which are also very fast. Example, tech bubble from 1998-2001 in the chart below.
I myself do hold bitcoin and ethereum and believe in the projects/developments that are occurring in this space but sometimes when prices move too fast in a short period of time you must always start to become wary or cautious as there will always be crashes or corrections in all markets. Remember prices don't always move in straight lines. For people holding crypto's enjoy the ride up and always as an investor be more scared of how much capital you may lose than how much you can make!!! Never be afraid to take profits also as no one will ever be able to predict where the top will be and a profit is a profit!!
As an ethereum holder, i'm looking forward to the release of Metropolis!! and for Bitcoin i'm looking forward to the upgrade in the speed for the transaction network.
In the end, I believe we are entering a bubble and probably still has more to go as i don't see the craziness or irrational behaviour of the people around me quite yet. Happy investing steemers and always be careful out there, markets will always try to take away your hard earned money! :)
If you enjoyed my post please upvote and follow me please!!
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yeah its a law, if something goes up one day it has to come down, I like bitcoin but I am worried about its flaws, if the bubble comes then there will be tons of opportunities to buy another cryptocurrencies from the second generation, with stronger and faster networks.
Thanks for your post
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Your welcome and yes their will always be more opportunities in markets.
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There's always a pattern of spikes and dips. But I don't think we're really in a bubble yet.
We're just at the beginning. Cryptocurrency has yet to go mainstream. Once that happens it will explode. Maybe in a few years we'll see a real bubble. But I don't think we're there yet.
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I agree also but all asset bubbles are different and what worries me is that the price of cryptos may rise 100's of % in a few months instead of a few years which would compress the time period.
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Good analysis! I can see how you relate this to the dot com bubble in that there are people who are speculatively investing in this new market and there is no way for all these coins to survive. I believe there is a long way to go and maybe there is a transfer of wealth or money that has never happened before in history.
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I've wondered that myself, but you make a great point. Other than one or two of my ubergeek friends (and my wife who gets to hear about it all the time) most of my friends and family say crypo-what!? when I try to talk to them about it.
I know there was a financial newsletter that highly recommended Ethereum along with a few other crypto currencies just before Ether took off. From the sound of it, they had readers numbering at least in the thousands, I doubt that would have been enough by itself to account for the rise, but the timing sure didn't hurt. The good part about it is they recommended it and still talk about it for the long haul, so I don't think they'll be "profit taking" anytime in the near future.
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