I will answer it once and for all.......

Is bitcoin in a bubble? That is the question on everyone's mind. The talking heads on CNBC and other business channels are talking about it. They are quick to point out how this is akin to the tech bubble in the NASDAQ, commonly known as "the dot com boom". Here is a graphical/pictorial representation to show the similarities:

I want to thank Macrobond Financial for the picture and the "analysis". But are they right?

For those who remember that period in the stock market, what sticks out to you most? Do you recall? And what is different about how things are now? In that time period, everyone was talking about stocks. Anything that was tied to the internet was an instant buy. People were using their credit cards to buy stocks knowing that the appreciation outpaced the interest rates. Everyone yearned to be a trader and wanted in the game. What did the market do was the most commonly asked question each day? 20 somethings who headed up anything that had .com in the name were instant rock stars. Most of these companies had no earnings, no money, and no business plan. It did not mater. Buy and get rich was all that mattered.

Does any of this ring a bell? If you were around in that time, it should take you back. Compare that to today and what is going on in cryptocurrencies. Yes we are up huge percentages. It is also true that many people are jumping into this market. Wall Street and the business channels are starting to wake up to what is going on here. That does not matter nor is it reflective of a bubble.

Here is the real test. Do you want to know if this is a bubble or not? There is an easy way to find out. Simply ask your barber about cryptocurrencies. Or your mother in law. Or the bartender at the local pub. Or the cab driver. Or the guy working at Home Depot. Or your dentist. Or your auto mechanic.

If these people know about and are investing in cryptocurrencies, then you are in a bubble.

Since my survey of those types of people is that they have no clue about this, then I will tell you there is NO BUBBLE. In fact. not only are we not to bubbleland, we are only in the early stages of the run up. In the dotcom era, Wall Street knew about and was touting those stocks; Wall Street is only figuring out how to get into this game. That is the major difference.

And the second your auto mechanic utters the word bitcoin or cryptocurrency, put your stop loss in.

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