This question has been floating around the Internet lately so I’d like to answer it here once and for all in a few simple words.

Of course, nobody has mistaken the new digital currency for a flower.

What people really want to know is: Will Bitcoin sustain it’s new $1,000 level, will it grow, our will it crash?

The reference comes from Holland. About 400 years ago when the Tulips were first introduced, they quickly became very valuable.

“At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman.”

Today, the term Tulip Mania is used as the classic example of an asset bubble.

Main Differences

1. Supply - Tulips can be grown. So over time, they are able to increase in order to meet the market’s demand. The amount of Bitcoins in the world will never exceed 21 million. So supply will remain limited.

2. Liquidity - Tulips are an asset, whereas Bitcoin is a form of money.

One of the requirements to be considered money is liquidity. A flower that costs as much as a house is not an easy thing to trade. It cannot be split into smaller pieces for smaller transactions without losing it’s value.

Bitcoin can be divided to the 8th decimal making it liquid for trade.

3. Decay - Very simple… flowers cannot be used as a way to store value because they will quickly wilt and be worthless.

In conclusion, Bitcoins are not Tulips.

Will it there be rapid rises and falls in price as confidence shifts? Certainly!!

It’s up to us, the global Internet community, to decide weather we want this new coin or not. The sooner we do that, the quicker the price will stabilize.