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: \u201cWe told you!\u201d 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 \u2014 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\u2019s situation is similar, yet it\u2019s too early to speak of the current bear trend\u2019s length.In April 2021, a survey among Bank of America\u2019s 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 \u2018bubble theorists\u2019, and we understand their concerns. But let\u2019s see what they are and how we can debunk them.1. Bitcoin is governed by no oneBubble. Bitcoin isn\u2019t administered by anyone, it\u2019s not backed by the government \u2014 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\u2019s faith.Not a bubble. Developed nations have legalized\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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