Seemingly like clockwork, when there is a new record broken by Bitcoin in this unprecedented rise of digital currencies, there are those who want to draw similarities to different bubbles.
David Ader, chief macro strategist at Informa Financial Intelligence, is now trying to show how Bitcoin’s gains resemble that of the Nasdaq Telecommunications Index before the tech bubble burst.
An overly frothy market
Placing Bitcoin’s growth chart over that of the Nasdaq Telecommunications Index, and its subsequent rise, Adler is surmising that Bitcoin has hit the same peak and thus should be ready to plummet in a similar style.
Nasdaq reached its peak in 2000 before a monumental crash and for Adler, the similarities are there for Bitcoin’s run to this most recent all time high.
“This is the price chart for an overly frothy market, in my opinion. I just don’t see anything quite as comparable to this in bubblelicious terms,” said Ader, a former top-rated bond market strategist.
“I think it’s going to come to a sorry ending,” Ader said. “I don’t know anybody who’s actually used a Bitcoin for any purpose legal or otherwise. This looks like an overly frothy market and frothy markets lose their froth.”
A new market
Bitcoin’s growth and most recent spike, have been attributed in part to many Wall Street investors starting to explore the digital currency after it overcame its scaling civil war on Aug. 1.
There is expected however to be another fork on the horizon for Bitcoin – in November – and depending on the outcome of that many feel it could be the prick to the bubble, or perhaps another stepping stone to even higher prices.
With all the hype and speculation around Bitcoin, there is contrasting ideas and analysis. Case in point is another graph comparing Bitcoin’s rise to bubbles gives totally different information.
An investigation and comparison of Bitcoin’s growth with other bubbles since 1990 show a totally different outcome.