These days, the dramatical fall in Bitcoin price for the first time has raised widespread concerns about this crypto-currency’s future. While Bitcoin holders worry that their properity may become worthless one day, potential investors have their doubts about whether to purchase Bitcoin or not. Keep in mind that studying Bitcoin’s development, many experts have called Bitcoin a bubble at some certain points. And now, has this bubble just burst?
As reported, the market price of Bitcoin unexpectely declined below $10000 in January 17, precisely a month from its reaching a peak, which means a sharp drop of over 50 percent. Remember that Bitcoin price started the year 2017 at $963, 38 and ended at $13,850.40, remarking the growth rate of more than 1300 percent. Although slight recovery has been observed, investors still worry about the fate of Bitcoin. Some even admitted the fact that Bitcoin bubble has popped. Is this true? Let’s make some comparision between the so-called Bitcoin bubble and the previous similar Dotcom bubble.
|Criteria||Dotcom Bubble||Bitcoin Bubble|
|Time||Late 1990s when the new Internet technology started to thrive||Right at the beginning of 2018|
|Overview||The hasty increase of Internet-based firms’ equity markets||The uncontrolled rise in this crypto-currency price willingly paid by investors|
|Evaluation tool||NASDAQ index (which reached a peak at 5048 on March 10, 2000 – as twice as the beginning)||Price index (which was on top of nearly $19,000 in December 2017)|
|Causes to burst||Too much fundings tighted in Dotcom startups. Leading high tech enterprises sold their stocks when NASDAQ was on top and so were investors, which caused a shortage in capital poured to Dotcom firms.||The factors that make Bitcoin bubble burst are rather complex, but people primarily attribute this price fall to strict regulations recently enforced by some government like South Korea, China or US on Bitcoin and other Crypto-currency trading.
Another reason may lie in China Bitcoin market, when lots of investors sold off their holdings to spend on trips and presents for the traditional New year coming.
|Result||The burst of Dotcom bubble resulted in the collapse of thousands of Dotcoms around the world and the huge investment in those also disappeared.||Luckily, a catastrophic result has not happened yet. No one can exactly predict the future of Bitcoin after the burst. Obviously, Bitcoin has its long way to go.|