IS BITCOIN THE MOTHER OF ALL BUBBLES? Business & Marketing Essay (Essay Sample)
With the value of bitcoin having fallen by around 70% since its peak in late 2019, the mother of all bubbles has now gone bust. More generally, cryptocurrencies have entered a not-so-cryptic apocalypse’ according to roubini (2018).
the paper was to determine if the student agrees with Roubini's assertions.
IS BITCOIN THE MOTHER OF ALL BUBBLES?
Is Bitcoin the Mother of all Bubbles?
Following its inception in 2009, Bitcoin has drawn excitement and a lot of talk from people of all cadres of life including those with no understanding of the financial markets. This can be attributed to the popular media that created extravagant expectations and touted the electronic currency as the next big thing. However, this unrealistic excitement has not materialized following the sharp decline in its value. On the contrary, economic experts have had contrasting opinions about the Bitcoin debacle. While some experts believe the Bitcoin has a window to rediscover itself, some like Roubini think that with its value having truncated by 70%, the mother of all bubble has gone burst. Moreover, according to him, the cryptocurrencies have entered a not-so-cryptic apocalypse. How accurate is Roubini? The paper highlights possible reasons for the sharp decline of bitcoin and why all is not lost for the cryptocurrency and blockchain technology as a whole.
For starters, the bitcoin is a decentralized digital currency. Being an electronic asset, people can buy, own, or send them to somebody else. By the year 2015, there were approximately 14 million bitcoins created with a steady increase of 25 bitcoins every 10 minutes. Notably, there was an agreed limit of 21 million bitcoins which were to be created before the year 2140 (Lewis 2015). Essentially, the bitcoin can be used for multiple purposes and act like the conventional currency which includes making bitcoin payments irrespective of geographical position and interference from financial institutions. Secondly, the bitcoin can be converted to other currencies, however, the owner must find someone to exchange it with. Additionally, it has price volatility just like any other currency. However, its price is more volatile compared to other currencies, a key feature that has profiled the bitcoin as the mother of all bubbles. This is because its volatility has sharply decreased.
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