[quote]
Negative: Tulip Bulbs, South Seas, Real Estate etc. People have thrown the word bubble around extensively as the crypto currency concept has reached mainstream critical mass. While I question if BTC really behaves like an unregulated stock, there is no doubt that even now with its mainstream exposure, it’s still dismissed by most people - something that can greatly affect it in its current state.[/quote]
The term bubble is being thrown around by hardcore investors for the exact reason you state. Interest is being throw into Cryptos far ahead of retailer willingness to adapt the currency, this is typically what causes a bubble. The tech bubble for example was caused by thousands of IPOs being pushed way beyond their value [which for the most part was negative] based upon the speculative future growth - We’re seeing the same thing happening now with stocks like Twitter and Amazon, both which have [b]major[/b] potential but Amazon for one has never posted a positive growth quarter and Twitter which has never been profitable either [even as a private company].
We’re seeing the same trend with crypto. . .Short-term speculators can be very scary, which is one of the reasons Berkshire Hathaway doesn’t split its Class-A stock, Warren Buffet believes that by not splitting and keeping values higher it keeps unpredictable short-term people who have no business investing from causing major shifts in his stock. Currently with crypto there are very few mainstream ways to use the coins outside of insider grown online stores and a few Die Harder franchisers - Which means people are buying something that has relatively no value with the expectation that it’ll have future value. . .Which causes it to skyrocket.
. . .Now while it shows the signs of being a bubble it doesn’t necessarily mean the bubble has to pop. If retailers start adopting it at a faster pace, and, transaction speeds are greatly sped up we will see VALUE catch up with COST and the bubble will shrink, because right now the COST is much higher than the actual value [if it were a stock the p/e would be very very high comparative to similar industries].
And while I don’t know much about transaction speeds or how to speed them up or why they’re slow [I actually just found out about this yesterday]. . .I can see this being the biggest hurdle to cryptos success.