Are Crypto Currencies gaining independence?


Bitcoin Market Cap

Take a moment and type “bitcoin usd” into Google. What comes up? A built in conversion tool with up to the minute updated prices from the 24/7 bitcoin pool. Bitcoin and Ethereum have been on a complete tear since last year and frankly they show no signs of stopping. Analysts online are afraid to weigh in because they could not have expected this type of growth coming from the crypto asset class of currencies. Predictors and speculators have gone on the record saying they expected bitcoin to reach $2000/coin by year 2020, and bitcoin hit that milestone over 2 weeks ago (3 years ahead of prediction). Now there are some that say bitcoin will reach a value of $5000/coin by 2020.

Crypto prices surge

This year, several cryptocurrencies have experienced notable increases in value.

The price of bitcoin, for example, reached $2,791.70 25th May, which represented a more than 200% increase from the cryptocurrency’s price of roughly $923.67 at the start of the year, according to the CoinDesk Bitcoin Price Index (BPI).

Amid this sharp rally, bitcoin’s market cap has surged, surpassing $45bn earlier this week, a roughly 50% increase in the last month, additional BPI figures show.

At the time of report, the currency’s price and market cap had both fallen back somewhat, reaching roughly $2,440 and $40bn at 16:30 UTC.

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Is the bitcoin mania just a bubble?

An article on suggests that bitcoin and other crypto-currencies are really just a rapidly inflating bubble and investors should steer clear. The reason is that while currencies like bitcoin are considered to be a legitimate form of money, it’s being treated as a speculative investment. Move of bitcoins buyers are under the age of 35 (over 60%). In other words, most of bitcoins users are millenials with little experience in risk management as opposed to older investors. The currency form is also extremely volatile and still considered to be largely experimental.

Bitcoin User Age

Dutch Tulip Mania

In the 17th century, formal futures markets developed in the Dutch Republic, providing the infrastructure for a massive bubble in the price of tulip bulbs.

The tulip first became fashionable in France, where early modern ladies of the aristocracy began sporting the flower on their dresses. From there, the tulip became the flower to show off social status and wealth. The demand for bulbs subsequently skyrocketed, and prices immediately followed.

At the peak of Tulip Mania in 1637, a single tulip bulb could cost as much as 10,000 gilders, the price of a nice middle-class townhouse in Amsterdam. According to one author, 12 acres of land was once offered for one rare bulb. For a flower bulb!

Of course, the bubble eventually burst. The price of tulip bulbs collapsed, and fortunes in perceived value disappeared over night.


Dutch Tulip Mania / Bubble explained (Short version)

Dutch Tulip Mania / Bubble explained (Long version)