I cannot deny the fact that Bitcoin attracts many investors who simply want to speculate on its volatility and generate profitability. Few Bitcoin investors are interested in its qualities, functions, and potential.
However, despite the speculation surrounding Bitcoin, it’s far from being a bubble and has lots of room for growth.
Check this table showing Bitcoin distribution:
As you can see in the chart above, almost 75% of the Bitcoin addresses worldwide hold less than 0.01 Bitcoin, which translates into less than $140 at Bitcoin’s current price. This means that we are very far from a real wide-spread Bitcoin adoption, which is how Bitcoin is currently seen in the media.
Only 1500 addresses - which probably represent around 1000 people, have more than 1000 Bitcoins. These people can shake the market, and there are very few of these people. There is room for more high-stakes owners, and more of these people would suggest more demand and a higher price.
Bitcoin is a newer product with a potential global impact - we cannot know if it’s a bubble because it’s something new and different. Other bubbles, such as the tulip mania, was in the Dutch Republic, the dot-com bubble was focused in the US, but Bitcoin is a global phenomenon so it’s not that easy to compare it.
Central banks warn citizens that Bitcoin resembles a bubble and that it seems similar to Ponzi schemes. Since Bitcoin is so new and different, it is currently unclear what its effects will be. Perhaps Bitcoin will adapt and become part of the whole Forex market.
Blockchain.info’s CEO thinks that starting in 2018, some central banks might buy Bitcoin in reserves, which would mean wider adoption.
“I think this year will be the first year we start to see central banks start to hold digital currencies as part of their balance sheet,”
Central Banks Will Add Cryptocurrencies to Reserves, Says Blockchain.info CEO - Cryptovest
For now, I think Bitcoin has much room for growth, even if its price is incredibly high.
According to the financial world, Bitcoin has been a bubble since it hit $10.
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I appreciate this article--some new information to chew on. I don't think anybody actually knows if there's a bubble right now, because we don't have the experience to put a price tag on cryptocurrency fundamentals. Your article brought some new (to me) perspective. Certainly Bitcoin has a track record and brand that are hard to beat, but still so many questions. One thing's for sure: a lot of people are putting a lot of money where their mouths are.
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Thanks a lot for sharing this post very informative.I personally feel we may not be in a bubble yet but while the transaction fees are high bitcoin may never really be used.I recently introduced my friend to cryptos and he is really fed up with fees so i had to educate him and told him to always use LTC for transactions.I really think the community needs to do as much as they can to welcome new users so they don't make the same mistakes that we once made.
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