It might be difficult to find any “seasoned” or experienced financial advisor that doesn’t think that cryptocurrency is a bubble. That, of course, doesn’t mean that this allegation is, in fact, true, but it can be hardly argued with the fact that the true value of crypto assets can be very difficult to determine to the exact point.
This case is visible in different values of various cryptocurrencies, alongside with the fact that a price of a digital asset can drop significantly often without an evident reason.
While some cryptos have a clear objective, previously determined goals, and even strong use cases like it is the fact with Ethereum (ETH) and Dapp development, or IOTA (MIOTA) and Tangle-based applications and products, these assets do not at all times reflect a precisely determined value of the circulating supplies.
This is why cryptocurrency is often seen as a bubble.
But, is it really, and if so, will the bubble burst?
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Is Cryptocurrency a Bubble?
Bubble in the sense of economy is defined as an exceeded value of a certain asset which is considered to be actually less valued in reality than it is in the market, which is what people fear the most when it comes to the crypto market.
In the course of a single year, from December of 2017 to this date when we are already getting closer to the end of Q4 of 2018, it is hard to neglect the fact that the total crypto market had lost nearly 90% of its total value within the initial timeframe.
After a massive spike against the fiat that took place from December of the last year, following through January of the current year of 2018, the majority of digital assets rebounded to reach their record prices in the market.
Ever since then, the market has been dipping badly, significantly lowering the value of cryptos, which inserts a harmful dose of doubt in many investors, additionally driving theories that the cryptocurrency bubble will burst.
Is Cryptocurrency a Part of a Rising Economy?
Not all crypto investors seem to be buying this theory despite the dips, although professor Nouriel Roubini of the New York University claims that some bubbles are hard to spot, also referring to the fact that Bitcoin gained around 900% of increased based on pure speculations that the price will only grow further from that point, without rewarding a solid value or a use case.
However, despite the fear that the crypto market might represent a massive bubble, the digital assets seem to become an integral part of a vast array of industries, which have to provide some solid value for a great part of cryptocurrencies available in the market.
Bitcoin can be looked upon in this case as on an isolated case because after all, the value of BTC in the market doesn’t necessarily have to rely on providing a use case or a service, as BTC represents the original crypto that has been around for almost 10 years now.
There are digital assets that can be definitely called “scam coins” and could be a part of the alleged bubble, but on the other hand, there are dozens of digital assets that have a massive potential, as well as applicable value, while integrating with major companies across the globe, which in a way makes these a part of a new age rising economy.
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