Bubble always start with Solid fundamentals, which the blockchain Technology has, but then speculation starts and rapid rally in prices gets more investors (this is happening Now) and at the end they end up holding a futuristic business at a ridiculous price.
When will bitcoin Prices fall and this bubble end? – nobody knows when it will happen, we have no tool to predict the madness of the Crowd but these are 3 main pre-requisites of a Bubble getting Over and valuation definitely has nothing to do with it.
The 3 Most Important Criteria of a Perfect Bubble are
-A Great Story about the Future
-Nobody understands how to Value it
-The Asset In-Play should be very new to the market and scarce.
“The Stock Market is always futuristic, though they always overdo it. The Price of Zee Entertainment went up 200x in 1998 and 1999 because markets believed that in the next 10 years every home would have a color TV and they would watch Zee TV, well the markets were right, but like always they overdid it and it took 16 years for Zee TV for reach its 2000 highs again. The Stock Price Corrected 95% as falling stock prices are followed by more selling.”- External source
If anybody remember the dot com crises, during this period many internet based companies founded and lots of them collapsed as at that time internet penetration was not much that resulted in low customer base and low volume business and finally bubble burst and most of the small companies collapsed Ebay and Amazon survived and now thriving so the moral of the story is Bitcoin is like the Amazon of dot com bubble, its the leader of the pack and all other new ICO’s
The Markets are never off-base about the Future, Computerized Currency is unquestionably great thing and simply like RBI is concocting Lakshmi as India’s Digital Currency, each other nation will think of its own money. We are exceptionally sure that the world would move from paper cash toward computerized money and this is certainly the Start. To the extent Bitcoin goes, its an incredible innovation, yet at the present time at current costs its equitable hypothesis.
History is in making and I am watching it form outside………………….
Independent Financial Analyst
LinkedIn Profile :- https://www.linkedin.com/in/yogesh-singh-204164116/