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RE: Is Bitcoin A (Tulip) Bubble? History's Most Exaggerated Non-Bubble (Even Tulip's Weren't Tulips)

in #bitcoin7 years ago

I got that number straight from the German Wiki article about the Tulipmania:

...und 1637 wurden für drei Zwiebeln 30.000 Gulden geboten.[48] Zum Vergleich: Das Durchschnittsjahreseinkommen in den Niederlanden lag bei etwa 150 Gulden...

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...and in 1637 there was an offer for three tulip bulbs over 30,000 Gulden. To compare that: The average income per year in the Netherlands was about 150 Gulden...

Although these specific tulips never made it over the counter, it is enough for a rough estimate of the entire mess, as I think. Even if the "stable" peak price was just 10,000 Gulden, the market "futures" were pointing upwards, not to mention that this price still would be equal to far more than half a million Dollar.

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My whole point here is that the entire Tulip situation was over-stated.

Wikipedia is not an acceptable sole-source when specifically discussing matters accused of being incorrectly hyped up in history. It will have exactly the same faults. You need more primary sources. Preferably, not Dutch Calvinists.

"there was an offer"

You can't price markets by offers. Offers are not a trade. Hell, you shouldn't even price them by a single trade.

"“There weren’t that many people involved and the economic repercussions were pretty minor,” Goldgar says."

...

"So if tulipmania wasn’t actually a calamity, why was it made out to be one? We have tetchy Christian moralists to blame for that. With great wealth comes great social anxiety, or as historian Simon Schama writes in The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age, “The prodigious quality of their success went to their heads, but it also made them a bit queasy.” All the outlandish stories of economic ruin, of an innocent sailor thrown in prison for eating a tulip bulb, of chimney sweeps wading into the market in hopes of striking it rich—those come from propaganda pamphlets published by Dutch Calvinists worried that the tulip-propelled consumerism boom would lead to societal decay. Their insistence that such great wealth was ungodly has even stayed with us to this day."

https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/

 7 years ago  Reveal Comment

Ah, well, you may have a point there. I mostly just use them for the minerals section of the Natural History Museum. Perhaps they are a biased source as well.

Ultimately, much like the current market cap of cryptocurrencies, the "market cap" of tulips was probably grossly overexaggerated by ignoring the effects of the order book vs. peak price:

https://steemit.com/taxes/@lexiconical/valuing-steem-rewards-as-taxable-income-is-a-vast-overstatement-of-tax-liability-part-2-the-thin-order-book-and-flash-crashes