There have been talks of whether Bitcoin is in a bubble or not. A bubble is when there is a rapid escalation of asset prices followed by a contraction. It is commonly used to represent the economic downturn that followed the Internet boom of the early 90s.

Bitcoin vs Internet

The boom brought about by the Internet has some factors in common with today’s Bitcoin rise. It emanated from within the technology sector. It was somewhat new and needed getting used to. Finally, and most importantly, it created innovation and new financial opportunities globally.

Bitcoin has seen several spikes in its price and drawn various interests. Its uptake has drawn concerns as well. Some market observers think its rise would burst like the Internet’s too.

“Bubbles are funny because, historically, manias and bubbles happen around things that change the way we live,” says hedge fund legend, Mike Novogratz. “If it’s the railway bubble or the internet bubble, they really did change the way we live. This blockchain revolution, decentralized revolution is going to change the way we live.”

In an interview with CNBC’s Fast Money, Novogratz notes that the blockchain economy has moved from the experiment to the implementing phase. He likened the unfolding situation to 1997 when no one could have understood ‘the ubiquity of the internet.’

He adds:

“Ten years, fifteen years from now, blockchain’s decentralized system will be everywhere. So, yes, it’s a bubble. It’s going to be one of the great manias of all time. Bitcoin happens to be the bellwether of this entire decentralized revolution. It’s the easiest way that people can get exposure to it.

“Right now, the total market cap of the whole blockchain, bitcoin, ethereum ecosystem is roughly $200 billion. In 1999, the internet got to around six and a half trillion. So we are a long long way from what a mania looks like. Prices will always get ahead of themselves with new technologies. Just like we have gold up and down, there will be big volatility and those stuff and at one point there would be a major correction.”

What’s to come

Novogratz sees Bitcoin as a digital gold that has become a store of value. He suggests Bitcoin is a better alternative to metal gold as a store of value especially for a generation growing up in a digital world.

He says: “But as we move into a digital world, having a digital store of value makes more and more sense. There are limited amount of Bitcoin. A very few people own it. There are about five million people that have crypto wallets and it is a world that all has access. So you have people in Taiwan, Korea, Japan, India, the United States and all over Europe that can participate. I think you got to let your imagine run on this one and things could go for a lot longer and a lot higher.”