Content adapted from this Zerohedge.com article : Source
Bitcoin is surging once again this morning, **up over 8.5% to retest $6000 once again (after dropping to $5366 just 2 days ago), **but according to Nasdaq, "Bitcoin is not a bubble," citing five reasons demonstrating why it's nothing like Tulip Mania...
The digital currency bitcoin rallied by over 300 percent since the start of the year and has recently surpassed the $4,000 mark. Unsurprisingly, many financial markets pundits consider such a sharp rally the creation of an asset bubble.
In all fairness, the returns that bitcoin and its digital peers in the crypto assets space are experiencing have not been seen since the day and age of the internet bubble in the late 1990s. However, Bitcoin has very different fundamentals than early internet stocks and a much more promising growth trajectory.
1. The Growing Acceptance of Bitcoin as Legal Tender
One of Bitcoin's biggest challenges so far has been acceptance by lawmakers and financial regulators due to its decentralized nature and its unfortunate association with criminal activities carried out on the dark web. However, Bitcoin's "official" acceptance is on the rise.
In April 2017, Japan announced that it would officially begin accepting Bitcoin as a legal payment method, which immediately boosted the price of bitcoin and has led to a substantial increase in merchant adoption across Japan.
In the Philippines, citizens have been increasingly using Bitcoin to send and receive low-cost remittances. This has not gone unnoticed by the country's central bank, which announced in February 2017 that it will regulate Bitcoin so that the digital currency can be used as an officially accepted remittance system and, thereby, granting it full legal status.
Countries such as Australia and Russia have recently made similar statements that could lead to Bitcoin becoming a fully accepted medium of exchange in their respective countries. This is a trend that is likely to continue, given the growing demand for Bitcoin as an investment as well as an online payment system.
2. Increasing Merchant Adoption
In the early years of Bitcoin, merchant adoption was limited to a few brave ecommerce stores, usually run by early-stage Bitcoin enthusiasts. This, however, has changed substantially as leading tech companies and ecommerce platforms have chosen to accept Bitcoin as a payment method. Microsoft, Rakuten and Overstock are three of the largest companies to accept Bitcoin payments.
With bitcoin's sharp price rally, increased media coverage and newfound acceptance in places such as Japan, Bitcoin merchant adoption is on the rise and this trend will likely continue.
The arguments for online merchants to accept Bitcoin are actually very strong; fees are lower than for credit card payments, chargeback fraud is entirely eliminated, new customers can be reached in underbanked regions and a new, tech-savvy consumer base can be attracted.
The more that merchant adoption increases globally, the more there will be regular and stable demand for the digital currency. And given the current low rate of merchant adoption, there is a substantial room for upside.
3. Bitcoin Is Increasingly Acting as a Store of Wealth in Distressed Economies
Another reason why Bitcoin is most likely not a bubble is that is has a much-need real world application in economically distressed countries. In places such as Venezuela, Bolivia and Zimbabwe, for example, bitcoin has been acting as a store of wealth and as an alternative spending currency as local currencies are weakening into worthlessness. This can be witnessed by increasing bitcoin trading volumes that are negatively correlated with the performance of local currencies and economic growth in distressed regions.
Bitcoin also allows individuals and businesses in countries with strict capital controls, such as Venezuela, to receive much-needed remittances to stay financially afloat. In other words, wherever there is economic distress, Bitcoin demand will likely rise and Bitcoin adoption will grow.
4. Bitcoin Has Only Just Gone Mainstream
You could say that 2017 has been the year in which Bitcoin has finally gone mainstream. Five years ago, if you would have asked the average person on the street what Bitcoin is, they would have most likely given you a bewildered look. Today, most people have at least heard of Bitcoin and many even know that one bitcoin is worth more than an ounce of gold.
Now that Bitcoin has become mainstream, the buying potential from new investors is immense, especially as institutional investors have started to open up to the idea of investing in bitcoin and other digital currencies.
5. Bitcoin's Supply Is Limited
Finally, one of the key reason why Bitcoin has become so valuable is that its increasing demand is met with a fixed limited supply.
Because of the way Bitcoin was created, only 21 million coins can ever be mined. Furthermore, the rate at which new coins are created slows down over time, which means the increasing demand for the digital currency is not only met with a limited total supply but also with a continuously slowing supply.
The discussion of whether Bitcoin is a bubble or not will likely continue indefinitely, but the comparison between Bitcoin and early internet stocks does not hold true due to the fundamental differences between the two asset classes.
As CoinTelegraph notes, countering no shortage of criticism from traditional financial circles that Bitcoin's price had grown too quickly and would inevitably crash, the new-found faith in Bitcoin and its maturing as a medium of exchange has become apparent in its increasing resilience to 'FUD' or other bad news.
Mainstream forecasters now predict further upward momentum for prices, with TradingView eyeing a new all-time high of $6,800 for November despite the uncertainty surrounding the SegWit2x hard fork.
I object to one statement made in the article. Bitcoin has definitely NOT gone mainstream, yet. I ask people in United States about bitcoin every single day. Most people are clueless. My favorite people to ask are Cashiers! Still nothing!
There is a huge difference between the Internet and Bitcoin. Bitcoin has become a currency and means of payment in Japan, the Philippines and slowly around the world. Bitcoin has a limited number of 21,000,000, and Bitcoin is the first program currency in the new blockchain technology that brings revolutionary changes in decentralization, data transfer speed, and connectivity to different platforms.
There are about 31 million users of Bitcoin (one of your past posts) of 7.7 billion people, the value will rise as the number of users increases, I believe that for 1 year the BTC will be at least $ 30-50,000. That's why it's time to invest right now. Thanks for useful information @zer0hedge
This is definitely not a bubble! Imagine the untapped yet very potential percentage of the world's population slowly getting into Bitcoin. With a very limited supply and a strong and growing support from the people as well as from commercial businesses, there is definitely no other way for Bitcoin but up. We are growing bigger and bigger. The demand is growing as a reaction to the growing number of people attracted to Bitcoin.
Cheers!
Really very nice idea.thanks for sharing with
wow, that's great news. Thanks @zer0hedge.
Certainly a lot more disclaimers and notes on these posts nowadays 😁
Nice information keep it up.
This good information😇😇😇
IAM STEEMIT JAKARTA INDONESIA
I wish If I have a Bit coin....
if Bitcoin would have been a bubble, I guess it would have blown few years ago, but it keeps increasing it's value. Thanks for the great article!
completely and totally agree that bitcoin will be the currency of the future.
Bitcoin is hardly in a bubble. Bubbles occur when assets are OVER-valued. Bitcoin continues increasing in price because as it's true value is being determined.
On the other hand, stocks, bonds, fiat money, and numerous other assets are in massive, dangerous bubbles. Whenever I advise anyone to get out of the US$ or real estate or stocks, they reply something to the effect of, "But it keeps rising in price." A classic feature of a late-stage bubble.
As those assets keep rising in price, more and more people jump because it seems like a sure thing. But there's only one thing that they can be entirely sure of, and that's that the insane increases will not continue.
Of course, bitcoin may be in a bit of a bubble, and it will go through corrections every now and then. But anyone who simply ignores bitcoin or any crypto simply because they believe it's in a bubble should take a longer, harder, and closer look.
If ya'll want a strong investment plan visit https://bitpetite.com/?aff=kipparinga (bitpetite) Its a bittumbler that privatizes btc transactions using other currencies. You as an investor get paid dividends from fees they charge people to use their service.
You can invest your BTC, ETH, LTC and or XMR into bitpetite for either;
6 weeks - 4.5% daily and 1 % on weekends. Total return - 147% (47%, 100% being your original investment)
9 weeks - 3.6% daily 1% on weekends. Total return - 180% (80%, 100% being your original investment)
They recently updated their server to allow almost instantaneous withdrawals - you get paid hourly through dividends and can withdraw on demand. (within the minimum amount which is less than 5 dollars)
I would deem it low - medium risk as of now -
Good luck and happy investing :)