The fact that since the beginning of 2021 the price of Bitcoin has risen so strongly, leads some market participants to fear the explosion of a bubble similar to that of 2017.
In fact, these fears have, in fact, characterized the long historical path of Bitcoin. For example, since the beginning, the detractors of the Bitcoin system have repeatedly devoted themselves to wanting to argue that the “mania” concerning Bitcoin, cryptocurrencies and blockchain, has a whole series of similarities with the “mania” that has animated the years Ninety and that concerned the development of the internet age.
Obviously, both the massive influx of investments and the surge in the value of Bitcoins, as well as the development of the blockchain, represent dynamics that are not appreciated by everyone. Also for these reasons, the proclamation of the fear of the explosion of the Bitcoin bubble seems to be cyclical, as it happens, whenever its value is on the rise.
Now, without any polemical spirit, if we take as a reference what happens on the stock exchange, or the fact that securities can have strong speculative interests of different origins, it is not very clear why and how Bitcoins should not suffer or benefit. than what usually happens in the economic world. In practice, market observers seem to tend to have two different weights and measures. However, beyond what may happen in the short and long term, what is more than established is that the value of Bitcoins continues to rise, which is very pleased to the holders of the virtual currency.
The strong rise in the value of Bitcoins raises fears of a bubble burst
In general, despite the concerns of detractors, Bitcoin belongs to a market that stimulates the enthusiasm of companies as much as that of individuals. To understand the scope, an aspect that could help explain certain attitudes on the part of some market observers, it is necessary at this point to remember that, over 18.6 million Bitcoins created since its launch in 2009, the entire market represents, albeit potentially, a whopping 1.015 billion dollars.
Certainly, Bitcoin up app it helps. The dynamics concerning the entire Bitcoin galaxy, surely, never cease to amaze. In this regard, it would be sufficient to recall that the multifaceted Elon Musk, with Tesla, bought 1.5 billion dollars in Bitcoin, a decision which he promptly defended and explained, also via twitter, essentially declaring that, when a currency suffering from a negative interest rate, you should be an idiot not to look elsewhere!
Certainly, a lapidary judgment that confirms, even more, the well-known axiom that states how Bitcoin is known and appreciated, also, as a fiduciary currency. Bitcoin enthusiasts, therefore, are highly motivated to want to see this decentralized network as a way to protect themselves from central bank actions. Not for nothing, the maximum number of Bitcoins in circulation has been set at 21 million, an amount engraved in the marble of an operation in which no monetary policy can interfere.
As evidence of the particular interest in Bitcoin, it should be noted that, especially in recent months, several financial companies have also shown a strong interest in this cryptocurrency. From the online payment giant PayPal to the investment fund giant BlackRock without forgetting the BNY Mellon, which is the oldest bank on Wall Street, as well as many US businessmen, have announced that they are preparing to launch services to buy, sell or use cryptocurrencies.
But the almost unstoppable growth of Bitcoin worries market observers, who believe that with a price that has increased fivefold in a year, a sharp correction, or even a bubble burst, is likely.
Finally, central banks, meanwhile, regularly continue to criticize cryptocurrencies, as does European Central Bank President Christine Lagarde, who has called Bitcoin a highly speculative asset.