Billionaire/legendary investor Warren Buffett has joined many other wall street investors, in saying bitcoin is a bubble. Buffett has said, "You can’t value bitcoin because it’s not a value-producing asset." I strongly disagree with this statement due to the fact that Bitcoin can be converted to cold hard cash. Also, Bitcoin can be used to buy many products online, and on the streets.
Buffett made these comments about bitcoin in late October due to a 2,000 price increase. He urges people to stay away from bitcoin, due to his belief of bitcoin being a fraud and not a real currency.
Is Bitcoin Really a Bubble?
Well the best way to compare an instance of a large bubble is looking at the tulip bubble in the early 1600s. Below is a graph of the turlip mania bubble:
As you can see in the tulip chart, there was a significant drop off in 1637, where the price of the tulip completely dipped. Now, when you anazlize a bitcoin chart, it is much different than the Tulip bubble graph. Below is a graph of bitcoin.
On the bitcoin chart, we can see steady increases, and steady decreases. Recently, Bitcoin surged upward and reached an all time high of $19,500. Since then, bitcoin has dropped to around $12,000 to correct the massive surge, which just shows that bitcoin is a stable currency.
Is bitcoin really a bubble? Do you agree with Warren Buffett? leave a comment and let me know!