Bitcoin Dwarfs Even The 17th Century Dutch Tulip Mania! Still It's Not A Bubble. Right? A Regular Girl Considering Her First Real Crypto Investment
History never really says goodbye. History says: 'See you later'. - Eduardo Galeano
There are people who agree on that theory and compare Bitcoin's incredible rise with the famous Dutch tulip craze.
Before I get into that, I'd like to ask you the following question:
How much would you pay for a tulip?
Well if you had lived in Holland 400 years ago, it may have cost you your entire home. Back then a good trader could earn up to 60,000 florins in a month - approximately $61,710 adjusted to current US dollars.
Tulip traders were the miners of the 17th century - until the market crashed entirely.
Now there are people who compare the tulip bubble with today's Bitcoin high. The believers advice to not confuse speculation with serious investment while the doubters remind us of the missing basis and countervalue.
According to Nasdaq Bitcoin is not a bubble. Bitcoin is rather starting out than peaking if you believe in Nasdaq's Five Reasons Why Bitcoin is Not A Bubble.
But talking seriously: Doesn't the pace scare you sometimes? I really believe that this is a legitimate question.
If it's not a bubble, what will be backing its value in the long run?
Picture kindly provided by pixabay.com
What a ride!
This is my very first blog post about Bitcoin, so please excuse any beginner's mistakes and stupid questions.
Since more and more people who I trust are trying to convince me to invest in Bitcoin, I need to start calculating the risk.
Looking at the numbers one might be stupid keeping out off the market.
Bitcoin is going mainstream and I'm asking myself why I shouldn't be part of it.
A couple of years ago, if you would have asked an average person on the street what Bitcoin is, they would have most likely shrugged their shoulders. In 2017 if you ask people what 'digital money' is, they proactively reply: 'Bitcoin.'
The awareness level of Bitcoin is increasing as fast as its price.
Bitcoin has become the driving force of a whole new and very promising market like it has never existed before. 'The mother of all coins' has smoothed the way for all following tokens and also proved that 'internet money' is for real.
In distressed economies like Venezuela, for instance, Bitcoin has been already implemented as a store of wealth.
As an answer to fiat currencies that are weakening into worthlessness, Bitcoin has been successfully used as an alternative spending currency. Thus, it has ensured to give the value back to the economical owners.
According to these evolutions, it's really hard to stay away from it. Stories like these are grist to the Bitcoin mill - and great arguments for my friends that want to get me on board.
The basis is: trust.
Yet, what prevents us from distrust - the crash?
Getting back to the famous tulip mania, the reasons for the burst were very simple: someone just decided not to pay, everyone lost confidence and the prices start to fall.
It happens very often with economic bubbles that as the price rises to a point where it's obviously so incredibly inflated, some smart stakeholders decide to get out and capitalize on the absurd prices. If these stakeholders have enough influence in the whole market, a domino effect can take place where more and more people try to sell at ever decreasing prices.
Now how do we know that this is not going to happen with Bitcoin?
Are we sure that some of the early adopters - that are already Bitcoin millionaires - won't have enough in a couple of months or years?
What if they're not driven by ideology but simply personal financial success? May they have enough influence to sweep away a whole market?
The ultimate safety strategy is: diversification.
Warren Buffet said once:
Never test the depth of a river with both of your feet.
Diversification - even in high-risk markets like the crypto market - helps reduce risk and maximize safer earnings. When one coin fails, you still don't loose all your assets.
It's a smart strategy. However, Bitcoin is the flagship. If the 'mother of all coins' crashed entirely, any other would supposedly follow.
Supposedly.
There are a lot of 'maybes' in this article, and I have the sensation that it might be almost impossible to clear them out completely.
But feel free to give it a try :-)
Have a splendid weekend crypto people,
Marly -
Thanks for your valuable time!
This blog was launched at the end of July 2016
aiming to provide stories for open-minded
people who enjoy living on the edge of their lives,
stepping out of comfort zones, going on adventure,
doing extreme sports and embracing the new.
Welcome to the too-much-energy-blog!
PS: Who again said that these crazy coins weren't for real?
Original content. Quote found on quotefancy.com.
A regular girl??
@surfermarly, you are definitely NOT a regular girl!
Haha! Hey @vcelier!
Thanks for correcting me :-) Maybe you're right...
It was nice to meet you in person at Steemfest² by the way.
I lead a very conservative lifestyle and the volatility of bitcoin really concerns me but we do not make noticeable gains by things having to be classified as "no risk". And, looking at the currency in my country of continuing to print money, is also like building one's house on sand rather than rock. Very nice thought provoking post. There's much to think about and study on the subject.
Thank you, @team101!
To me safety comes first and then eventual gain. I'm not interested in quick returns, but want to know my earnings stored at a place where nobody can touch them and where I have access whenever I want. Right now it's difficult to find such place. It sounds weird, but a bank account might be less secure than a BTC wallet nowadays.
I'm glad you considered this thought-provoking! :-)
Have a great weekend
I do agree with you concerning safety and, in my estimation, bank accounts do no rate very high on that list with me.
Great post. I have bitcoin only from converting steem. I've been on the fence for a while as well. I think I'm going to be getting more, along with BCH. It seems even if the bubble bursts, blockchain based money is here to stay. So diversify it is, and spread my investments around. Oh and thanks for all you do for the Steemit community - I'm considering you a Steemit mentor, and following your example. ✌🏾😊
First of all, thanks for the flowers :-) Maybe I'm not the greatest crypto expert, but I can talk hours about steemit - haha!
Well a lot of people are powering down Steem, investing in BTC and reinvesting their return. That's a quite smart strategy, and I'm really considering to get on board.
I'm generally a no risk person with regards to financial affairs, so it would be a big step for me :-)
I don't think bitcoin is a bubble. Unless some other coin, possibly steem, takes much of the market, I think bitcoin will continue to expand predominately as a hedge against inflation, since it seems bitcoin continues to get more expensive over time.
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I can't tell if what will hapoen on bitcoin on the coming future, but because of its continuous development and forks I think people will soon get tired of it and turn their heads to a more stable crypto.. as we can see BCH is the same as the price of etherium couple of months ago when it came out it but now bch price is rising. On the other hand bitcoin may continue to rise but I always think that it will have a limit and it will fall if the history repeat itself like the tulip.
I will take the quotes of Warren Buffet as what you said "ultimate stratigy" "Never test the depth of the river with both of your feet" as long as bitcoin continue to rise let's go with the flow.
The big question is: where is the limit? The fact that there are only 21 million Bitcoins that can be mined in total may be the main reason for the current high demand. But this may not last forever.
After such a ride, even a stagnant price may cause a selling wave.
it is not the mining, but the the trust of people may have a limit, if you are holding bitcoin you will also experience all of the upcoming forks.. some people are still adopting on the last fork and bitcoin transaction fee is really pricey.
The mining of our bitcoin today is not what it was years ago and it is not easy as before. Only big companies of miners will have a profit or those people with big capital for mining hardware can do it today. :(
I admit I have a doubt but still hoping for the best for bitcoin. that's it. haha.. I really enjoyed this post of yours, it made my sleeping brain to operate lol... @surfermarly ^^
So much talk about how people think this is a bubble etc. The only thing that's a bubble right now is the USA housing market yet again and so called big back to big to fail. If your tired of the government tossing money around like we have it to toss around then buy into bitcoin and other worthy cryptos that have proven themselves.
P.S your shirts awesome! Did you get it made yourself?
I'm not really tired of something, I just look for the very best investment option :-)
Right now, I don't feel that my money is safe at my bank account anymore both due to vulnerability and loss in value. So I'm studying alternatives.
These shirts were given to all of the participants at Steemfest² in Lisbon. I agree, they're really cool! :-)
Great post! When people understand BTC's implications it'll snap 'em out of all this bubble babble. Is the Internet a bubble? Is email a bubble? No, and no. They're ubiquitous public services, just like Bitcoin 🚀🌅
Thank you!
Well, the internet and email are already established technologies that are effectively used by billions of people. How many people are already involved with cryptocurrencies? You can't compare them yet. But probably one day we will...:-)
value of all bitcoin together is barely half the value of facebook
....and that should tell me what exactly? :-)
well all those super high valued company's also alibaba appla google microsoft and all of the nasdaq and dow together is the marketcapitalisation and is the total value of the USDollar. But because there is so much dollar printed, and in terms of numbers even more the bitcoin has only a max of 21 milion. So bitcoin is at this point still super super cheap if you compare it to the dollar so your interest in bitcoin a smart move, because there is a limited amount and a tine supply. Also only 5 milion people worldwide seem to own it
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