Since its first big spike in growth and subsequent plummet with the Mt. Gox hack, Bitcoin has been labeled a bubble waiting to burst. People have likened its growth to many different bubbles, most notably the dotcom boom in the 1990s.
However, the truth of the matter is that Bitcoin keeps breaking barriers as it reached another all time high this week. In fact, a closer inspection of the growth, and the eventual burst of the associated bubbles shows that Bitcoin is so far off the charts that it looks like an absolute outlier.
An age of digital currencies
This year alone, Bitcoin has surged over 350 percent as it reached $4,650 coin. However, it is not the only one driving the market for digital currencies.
“The entire market cap for digital currencies is up near 800 percent this year as other cryptocurrencies experience huge gains, some even more than Bitcoin.”
Ripple showed at the halfway stage of the year that it was the best performer as it experienced growth of 4,000 percent at the end of the second quarter this year.
With so many investors, such as billionaire investor and co-chairman of Oaktree Capital Group, Howard Marks, the man who predicted the dotcom bubble, calling this another fad or bubble, their analysis is lacking somewhat.
Looking at a chart of the growth of sectors that experienced bubbles since 1990, there is a familiar pattern. However, Bitcoin skyrockets off and away from that chart, showing no correlation with the tech bubble, the homebuilders bubble or the biotech bubble.
Maturity rather than a bubble
While the dotcom bubble had similarities to the way in which Bitcoin was attracting money, as people simply tried to align themselves to any sort of Internet company regardless of its profitability, there are those who think Bitcoin is actually maturing.
Rather than attracting any kind of interest or investment, Bitcoin has started enticing traditional investors.
Believers in the digital coin, such as Octagon Strategy’s Dave Chapman, say this is actually just the tipping point and that Bitcoin can grow to reach $10,000 very soon.