Even those who have never invested in Bitcoin before begin to monitor his progress closely. That's because the currency has recently soared, causing the excitement of people who own Bitcoins and wondering how much value could climb.

There are even cases where people without interest for cryptocurrency time to start getting involved in the Bitcoin boom. But some viewers wonder if the bubble will burst, and if so, how long from now?

Bitcoin shows many signs of a classic bubble

Derek Thompson, who covers the Atlantic economy as editor, notes that & # 39; 39 It is difficult to determine if Bitcoin is a bubble because it is an entire industry. However, he thinks that recent Bitcoin models are similar to other famous bubbles that burst – like the dotcom bubble.

Bitcoin is a subject about the language and the mind of everyone. Investors make important life decisions based on the value of Bitcoin, and they often make impressive predictions about what will happen in the future. People have also done these actions in association with other things that went bankrupt, leading individuals to warn the story will repeat themselves. They say the only thing they are not sure about is when it will happen.

The volatility of Bitcoin is a constant

One of the reasons people drink on Bitcoins is that their value has soared dramatically. At the beginning of 2017, a Bitcoin was worth $ 1,000. Now its value is $ 5,000. Then there was a point in September where the coin value was close to $ 5,000, but it dropped to $ 3,200 just two weeks later.

For a broader perspective, one must not realize Bitcoin – also fluctuate. This reality could theoretically contribute to the fear that Bitcoin is a bubble. They might assume that Bitcoin is as volatile as any other cryptocurrency, but the compiled market statistics actually indicate that it is the most stable.

Nevertheless, some people who intelligently follow the market expect volatility. Dave Birch, founder of Consult Hyperion, a consulting firm in the field of electronic transactions, even said: "We do not invest in Bitcoin, we play in Bitcoin."

He supports this belief advising people to invest only as much as they are willing to lose. If individuals did this, the possibility of a bursting Bitcoin bubble would not be so scary. Instead, many people have moved all their investments into the Bitcoin world.

Anonymous transactions and lack of spending options cause raised eyebrows

A feature that attracts many people to Bitcoin is the ability to send and receive money. Money without revealing any personal information. They also like the lack of government regulation and believe that by investing in the Bitcoin market, they enjoy greater financial freedom.

However, Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, calls the idea questionable private Bitcoin transactions. He does not believe that governments around the world will allow the lack of personal identification information associated with Bitcoin to persist forever and that this is happening in the United States. The IRS has already required user registrations associated with the Coinbase Web site

In addition, Chainalysis is a company specializing in the identification of people who own the digital wallets used to store Bitcoins. The information discovered reduces fraud and money laundering.

Dalio also mentions the high amount of speculation and the lack of spending options for Bitcoin owners. He believes that the concept of Bitcoin could work because of this speculation and that people do not have enough ways to use the Bitcoins that they own. For these reasons, he admits that there is a Bitcoin bubble, and that is the only logical conclusion given the rapid rise in the value of Bitcoin.

Controlling the Market in the Hands of a Small Number of People

Another thing that could shatter the Bitcoin bubble – or at least panick investors – is the fact that about 1,000 people hold about 40% of all Bitcoins. Individuals linked to large amounts of cryptocurrency are often referred to as "whales". If they choose to suddenly sell a lot of Bitcoins to take advantage of the high market prices, other Bitcoin owners notice.

There is also concern that whales may coordinate their actions and work together to cause the market to fluctuate. Because the laws surrounding cryptocurrency are not concrete, there are uncertainties about the kind of punishments they might face.

The founder of Cryptocurrency says that Bitcoin is not a bubble

Abundant online resources claiming that there is no doubt Bitcoin is a huge bubble soon to burst, some people offer alternative views. One of them is Ben Davies, co-founder of another cryptocurrency called Glint. He thinks people do not look at the big picture of Bitcoin, and that leads them to see him incorrectly as a bubble.

Davies also thinks that the way people often compare Bitcoin to the bubble associated with tulip bulbs does not hold water. He notes that although tulip prices have skyrocketed, they have seen a sharp decline, this historic event is a "bad comparison". He claims that the price increases associated with tulips were not similar to the crypto-currency phenomenon. However, even Davies admits that Bitcoin "has all the features and antecedents that are the precursor of a bubble."

This is just a sample of why many people believe that Bitcoin is a gigantic bubble that is a substantial concern. To avoid falling into the kind of problems that could potentially ruin their lives, investors should continue to study the market regularly and see how the value of Bitcoin fluctuates.

In addition, it is smart to have a plan for the bubble burst. Many of the people who have been hardest hit by previous bubbles have been those who have not stopped thinking "What if?" And found what to do if the worst happened.

Failure to do so could mean that a person ignores the story.