The digital currency Bitcoin has suddenly crashed. This makes many people doubt it: Will the big bubble burst? Or how much is the crypto substitute currency actually worth?
Maybe Bitcoin investors are not normal investors. One must doubt at this point, because otherwise their recent emotional outbursts cannot be explained. This week some of them cheered loudly on relevant forums, because the digital guidance currency rose since beginning of the week around 471 euro. This is indeed a proud performance, especially as it started at a level of around 3350 euros. It corresponded to a gain of 14 percent. Many other companies, including their shareholders, would have been delighted to hear this. Less pleasing, however, is that the same Bitcoin two weeks ago was still worth a good 5700 euros. Thus about 70 per cent more than now, according to http://www.bestbitcoinexchange.net/.
At the end of July, it was worth around twice what it still costs today. If one leads oneself that before eyes, would you then as investors in view of this loss of value still celebrate the recent 400 euro?
Bitcoin investors really don’t have a big reason for this at the moment. Unless one would associate the rise since the beginning of the week with the great hope that it will now go up again permanently with the price. But what it doesn’t really look like at the moment. For more than half a year now, the share price has been bobbing sideways listlessly. Occasionally it even plops a little further downwards. In order to take a recognisable path upwards again, the Bitcoin would not only have to struggle its way out of the recent price dip in mid-November and gain another 2000 euros. But it would have to remain also afterwards still clearly with the upward twist.
Misguided price movements
- After all, the digital coin was still worth an incredible 9000 euros pretty much exactly one year ago, at the end of November 2017. That was already a lot and made many investors rub their eyes.
- After that it even ignited another step up the ladder and shortly before Christmas 2017 reached its highest level to date with a gigantic 16,198 euros, around 20,000 dollars.
- In other words, it almost doubled its value once again within just four weeks.
- Such erroneous price movements are usually only known to stock market players from times when crashes precede them.
- In which bubbles in the market inflate and burst a short time later.
But even in the hot days shortly before the past crashes, it took longer, sometimes much longer, for share prices to appreciate in value, if they made it at all. The Dax also doubled shortly before the dotcom crash in 2000, but it took it almost three years. He started this last summit storm in August 1997. Even before the financial crisis of 2008, the steep rise in share prices stood: they tripled, but took about four years to do so, from February 2003 to mid-2007. The Dax has long since recovered from this crash as well, from then around 3800 points it again fought its way to the all-time high of around 7700 points. So it doubled again, but this time it even took four years to do so. He even tripled until the end, but the latter took him eight years. There can therefore be no talk of a similarly steep rise or even a bubble-like excess, at least not during the last stock upswing.
Nobel laureates warn against digital currency
With the Bitcoin, however, many experts had long suspected that the course was completely overheated and still is. Many already warned of the big Bitcoin bubble. These included Nobel Prize winner Robert Shiller and his colleague Joseph Stiglitz, who even called for a ban on the digital currency. Janet Yellen, the former chairman of the American Federal Reserve, joined the circle of Bitcoin critics just like her predecessor Ben Bernanke. Investor legend Warren Buffet also abhors the crypto currency and recently called it “rat poison in a square”. By the way, he warned against the “bad end” that the crypto money speculation would take when Bitcoin was still quoted at 5700 dollars in October 2017. This year he commented on the market with the words:
“The only thing about buying Bitcoin is to find someone who pays even more money for it. In his words, the market is more likely to follow the laws of the even bigger fool.
Warren Buffet’s main criticism is that Bitcoins are a form of investment that simply do not create any productive value. In the meantime, all the crypto currencies in the world together were worth over 800 billion dollars on the market. At present they are only