Bitcoin As a Bubble: 5 Pros and 5 Cons

A favorite entertainment of Bitcoin skeptics is to claim that the first cryptocurrency (same as any other, though) is a bubble. They propose arguments of which some look quite consistent, and when the Bitcoin price drops, they say: “We told you!” But their claims are based on a lack of understanding Bitcoin. In this article, we will suggest evidence that Bitcoin price fluctuations are not symptoms of a bubble, but a normal price dynamic of a young promising asset.A bubble is when a certain asset is being vigorously and thoughtlessly bought under emotion, its price grows much higher than its intrinsic value, and then people see this fact and start selling. We will get back to this concept later.The main reason to claim Bitcoin is a bubble today — its severe price fluctuations in 2018 and 2021. In 2017, the cryptocurrency showed an unpredictable 900% growth, and then suddenly crashed followed by a long bear market. Today’s situation is similar, yet it’s too early to speak of the current bear trend’s length.In April 2021, a survey among Bank of America’s professional investors showed that 74% of them consider Bitcoin a bubble. When the coin started tumbling in May, they must have got more firm in their opinion.There is a sense in the arguments of ‘bubble theorists’, and we understand their concerns. But let’s see what they are and how we can debunk them.1. Bitcoin is governed by no oneBubble. Bitcoin isn’t administered by anyone, it’s not backed by the government — unlike fiat currencies supported by huge banks and authorities. Many countries are still skeptical about Bitcoin as something temporary and not noteworthy and even ban it. Without proper management and support from the state, Bitcoin is only kept afloat due to people’s faith.Not a bubble. Developed nations have legalized…