Tulip bulbs vs bitcoin a bubble comparison ft
even a reasonable comparison to be made. While Tulip bulbs rose as much as 1,100 in one month at the peak of their mania, its easy to see the similarities between the two. By looking at that chart, it certainly seems competitive, but thats a discussion for another post. The digital currency's massive surge this year - it's up more than 1,400 - has all the hallmarks of a huge speculative bubble, according to people such as Warren Buffett. South Sea bubble, in the 18th century, shares in the South Sea Company, a British trading firm, soared on expectations it would soon reap bumper profits from trade with South America. Something that has a limited lifespan, cant be divided, is not at all fungible, cant be recognized for its valuable characteristics (unique color variations on the bloomed tulip and has no historical record of anything approaching stable value is highly unlikely to retain the kind. With the recent media hype, more people are trading bitcoin than ever before, evidenced by the record-high traffic at a number of the exchanges. People couldnt use iron, despite it being much more useful for many things, because its just too heavy relative to the value people ascribe. Cnnmoney (Hong Kong) First published December 8, 2017: 9:26.
When the tulip bubble collapsed, much of the Dutch economy was unaffected, which is likely the case if bitcoin ever collapses, according to Capital Economics. But people were putting up their homes as collateral, according to the Rijksmuseum - the Museum of the Netherlands - in Amsterdam. The former may well be true, and the latter may well happen. The South Sea bubble's collapse left a trail of bankruptcies in its wake.
As a store of value, theyre incredibly dissimilar. Is bitcoin better than gold? By looking at that chart, it certainly seems competitive, but thats. Theres not even a reasonable comparison to be made. The tulip bulb bubble was bound.
Speculators were buying bulbs in the hope that they could sell them on at an even higher price. Its price will continue to fluctuate and attempts by governments to regulate cryptocurrencies will have an impact in the long term. The temptation for many is to lump all cryptocurrencies together as a Wild West frontier, whilst ignoring the fact that Bitcoin is already well established and happily accepted by millions (and counting) as a viable currency. Wall Street didn't find its bottom until more than two years later, when the Dow languished 90 below its 1929 peak. But Shane Oliver, an economist at Australia's AMP Capital, said bitcoin's meteoric rise isn't quite like any previous bubbles he's seen before.
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