Rising Institutional Investor Interest Entering the Space Proves Why Bitcoin Is Not A Bubble

Bitcoin (BTC) has expanded all over the world in the last few years. However, there are several critics that are against the most popular digital asset and how it operates in the market. Some experts compare Bitcoin to other bubbles such as the tulip mania a few centuries back or the dotcom bubble twenty years ago. But are virtual currencies really a bubble?

Are Cryptocurrencies A Bubble?

Bitcoin continues to expand all over the world. There are many companies and firms that are embracing digital assets and blockchain technology as well. As mentioned before, there are several experts that consider that Bitcoin is in a bubble and that it can be compared to other bubbles in that took place in the past.

One of the most popular bubbles around the world is the tulip mania that took place between 1636 and 1637. The value of tulips increased between these years, even when they did not have a real use for consumers.

Bitcoin has experienced parabolic runs as well. The digital asset moved from $1,000 at the beginning of 2017 to $20,000 at the end of this same year. This attracted the attention of several investors that did not even know what virtual currencies were or how they worked. In 2018, Bitcoin fell more than 80% and other digital assets have also lost more than 90% of their value. XRP or NEM (XEM), for example, are down more than 90% from their all-time highs.

Dan Held, the Interchange co-founder, explained that Bitcoin might be a financial experiment but since it started to operate ten years ago, Bitcoin has processed more than 400 million transactions through a decentralized and censorship-resistant network.

Moreover, Bitcoins is also calling the attention of many large institutions such as the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), that is going to be launching its own institutional-based crypto platform called Bakkt. Furthermore, Fidelity Investments, one of the most popular and recognized financial giants in the United States, launched its Bitcoin custodian service for its more than 20,000 institutional clients.

Bitcoin could be attracting a large number of interested investors. The digital asset is going to be used by many companies around the world and help them improve their services and products. Individuals can also enjoy their features compared to tulips, that did not provide individuals with anything.

Currently, each BTC can be purchased for $5,330 and it has a market capitalization of over $94 billion. Experts suggest that Bitcoin’s price could increase if other companies and institutions enter the cryptocurrency space.

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