Bitcoin is not a currency, will it be the next tulip?

Similarities between Bitcoin and the Tulip Bubble

‌Speculative: Both Bitcoin and the Tulip Bubble experienced large price fluctuations and speculative hype. The price of Bitcoin rose sharply in a short period of time, attracting a large number of speculators. In the Tulip Bubble, the price of tulip bulbs also experienced a similar crazy rise.

‌Market Sentiment: Both triggered a frenzy in the market. In the Tulip Bubble, people competed to buy rare tulip varieties, expecting their prices to rise further. Similar sentiment also exists in the Bitcoin market, with investors expecting its price to continue to rise.

Differences between Bitcoin and the Tulip Bubble

‌Technical Basis: Bitcoin has decentralized blockchain technology, which provides it with unique technical support and value foundation. Tulips have no technical support and rely entirely on market hype.

‌Application Scenario: Bitcoin, as a virtual currency, has functions such as cross-border payment and storage of value, while tulips are only ornamental plants and have no practical application value.

‌Regulatory Environment: The Bitcoin market is regulated by many countries and regions around the world. Although there are uncertainties, its legality and regulatory environment are relatively clear. The Tulip Bubble did not have a similar regulatory environment and relied entirely on market hype.

A currency cannot have such a large volatility. Bitcoin is just a crazy speculative product now.

I remember someone said a few years ago that the current Bitcoin market is not big enough, so it is easy to be manipulated. After a few years, when the market is big, the volatility of Bitcoin will stabilize.

4 years ago, I participated in the hype of Bitcoin and Ethereum, especially Ethereum. In the last crazy days, Ethereum had a big increase every day. Those days are still vivid in my mind. 4 years have passed, and the trend of Bitcoin is exactly the same as that period! Will the final outcome be the same as it was then?

I am a firm supporter of Bitcoin. I think Bitcoin is valuable. It is not an asset that traditional economics believes will generate profits or interest. It is similar to gold. It can be stored and traded. Its scarcity and decentralization are the most basic and original characteristics of traditional currency, just like gold (or silver) was a natural currency in ancient times.

Today’s flooded US dollars have hyped Bitcoin to the sky. From a certain perspective, it is better to say that the flooded US dollars are not a currency than that Bitcoin is not a currency!

In the current world monetary system, Bitcoin is not a currency. Its fluctuation range is too large. But, in fact, it is designed based on currency as a medium for physical transactions, and it has the most simple and basic characteristics of currency.

But now Bitcoin is inevitably doomed to suffer the fate of bad money driving out good money!

Bitcoin will not become the next tulip, just like gold has always existed and has always been valuable. However, Bitcoin is manipulated, and it is destined to disturb the world like tulips. Some people will become rich because of Bitcoin, and more people may go bankrupt.