Tags: bitcoin | bubble | economics | payments | spending | investing

Bitcoin Unlike Any Other Bubble We've Ever Seen

a mock up of a gold coin with a bee on it to symbolize bitcoin
(AP)

Thursday, 14 January 2021 04:06 PM EST

While the jury is still out on whether Bitcoin is a bubble, one thing is certain: it is unlike any other bubble we have seen.

Previous speculative asset-inflation episodes were either a one-off, like tulip mania in the 17th century, or the boom-doom cycle took many years, like gold. Bitcoin, by comparison, has survived three peak-to-trough drawdowns of over 80% in less than 10 years. The cryptocurrency surged past $40,000 last week to set an all-time high. It has fallen more than 15% since then.

Man Group, the world's biggest publicly traded hedge fund firm, compares Bitcoin to Prometheus in Greek mythology, whose liver keeps growing back, every time a giant eagle pecked it out.

"Every time a Bitcoin bubble bursts, another grows back to replace it," Man Group's analysts wrote in a note dated Jan. 12. "This very frequency makes the Bitcoin narrative somewhat atypical relative to the great bubbles of the past."

"Instead of considering each individual spike and fall as a discrete bubble, there may be more merit in the argument that this volatility is simply part of the price discovery in a new asset class, and that these are not bubbles, but part of a not-so-random walk that will eventually dwindle to give Bitcoin more stability, and ultimately, legitimacy," the analysts wrote.

© Copyright 2025 Bloomberg News. All rights reserved.


StreetTalk
While the jury is still out on whether Bitcoin is a bubble, one thing is certain: it is unlike any other bubble we have seen.
bitcoin, bubble, economics, payments, spending, investing
216
2021-06-14
Thursday, 14 January 2021 04:06 PM
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