Enter the terms you wish to search for. The recent plummet economist bitcoin bubbles led to alarm among investors that bitcoin mania is the next big bubble.
Financial bubbles like the 1990s internet bubble, the 2008 U. 1683 Dutch tulip mania are characterized by a surge in the price of an asset to a level much higher than its fundamental value. Bubbles often pop, followed by an economic crash. In the case of bitcoin, the price of the currency has inflated 60-fold in just three years. In November and December of 2017, bitcoin mania drew both professional and amateur investors. Speculation swirled that the bitcoin bubble could pop following the Tuesday fall in prices among major cryptocurrencies including bitcoin, ethereum, ripple, and litecoin. American economist Paul Krugman tweeted about the cryptocurrency Wednesday, writing “more than ever, this looks like a pure bubble.
North American Securities Administrators Association regulator Joseph Borg told CNBC in December that some people seeking to invest in bitcoin were taking out mortgages on their homes. 100,000 a year, who’s got a mortgage and two kids in college ought to be invested in,” Borg said. In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Berkshire Hathaway Chairman and CEO Warren Buffett said on CNBC last week. Many significant bubbles, including the American housing bubble, the stock market and the tulip craze in Holland in the 1600s involved commodities— physical goods or representative shares that could be used for transaction. A non-virtual currency, like the United States dollar, does not experience the same volatility. The blockchain currency’s Tuesday plunge was not the first time the bitcoin bubble popped.