THE BITCOIN BUBBLE

Because it’s illogical and more importantly the prices the least relevant or interesting part of Bitcoin Can you explain that the economy to people because a lot of people would say oh that makes sense. But if you explain it a little bit better and you understand that it doesn’t really make sense. We’ll think about it this way in 2000s – 90% of all internet start-Ups went belly-up almost a Trillion dollars of value was destroyed and That was the internet’s best year. Why? because that’s when you started really seeing the web take off and the utility and Adoption all hit these inflection points with the the real explosion in mobile the beginning of smartphones and mobile internet the web had finally taken hold and was beginning to get serious attention from Business and all of the first generation in the internet starts blew up But what really happened is in that in the last two years in that bubble the the internet became entrenched in everybody’s life 2000 was Simultaneously the internet death and it’s rebirth and so but that is capitalism that process of creative destruction and rebirth is the process that creates tremendous Innovation and attention for things Bitcoin has now gone through four bubbles like this and in fact everybody knows about the November 2013 went up to $1,000 crashed down to 230 We’re at 270 now.

Yeah! But what people don’t know is that that’s not the biggest bubble Bitcoin has ever had two years before that bitcoin shot up to $30 and crashed to 25 cents and in relative terms that was a bigger climb and the much bigger drop and it took almost two years to recover from that and That was its second biggest bubble because a really big bubble was when it went from a thousandth of a penny to a dollar at one dollar that was the real birth of Bitcoin because Parity was almost considered unattainable the dollar per Bitcoin like a holy grail dream Right because it started off as worth basically zero and an idea.

Absolutely and the idea that you can bootstrap a global currency from nothing was in itself a ridiculous idea So when you hit dollar parity you’ve proven that you can bootstrap a global currency from nothing and that’s never happened before To then say that the Bitcoin is dead because it’s a 260 If you go back the idea that it could ever reach 260 was insane and by the way We’re not done. We’ve got at least three or four more bubbles right bitcoin is not going to now be steady Because every time attention shifts back it blows another huge rise and Because there’s not enough to sustain that rise usually it will then revert and crash down again. This is a rollercoaster It’s going to continue to be a rollercoaster for three or four years just like the internet was the big difference the internet didn’t have a single stock price that everyone could pay attention to So it’s both a blessing and a curse.

It’s a blessing because it’s an investment vehicle by attracting people to speculate on it it’s generated a lot of attention when it goes up it generates a lot of investment in Bitcoin companies and a lot of the early bitcoin millionaires if you like We’re able to reinvest their bitcoin into startups, but at the same time double-edged sword Every time it crashes someone writes in an obituary for bitcoin like “bitcoin is now dead” By the way, there’s a site called bitcoin obituaries.com where you can read 150 obituaries written since 2010 all of which are not true And I am guaranteeing you they’re going to be two or three more years of Obituaries being written about bitcoin.

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