|Apr 16, 2018 11:28 AM||By: Ben Noble | 3981 Views|
Bitcoin doomsayers have once repeatedly called it too early. Bank of America Corp., the second-largest bank in the US by total assets, stated that “the greatest bubble in history is popping”. Anyhow, it doesn’t seem that way. The price of Bitcoin has broken beyond the $8,000 mark and has steadily accumulated gains over the weekend. Yes, this could be just a simplistic short squeeze before the very imminent death of the cryptocurrency market, but what has history shown us?
Bitcoin is one of “the greatest bubbles in history”, Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, wrote in a note Sunday. Hartnett leads an analysis group that concluded the Bitcoin bubble has previously burst. Equipped with an X (Years from Peak) and Y (Multiple from starting level) charts, the group tells the cryptocurrency peaked in December, when it reached $20,000, and is on a ‘post-peak’ style.
To strengthen up the ‘solid reasoning’, Hartnett’s team linked its price behavior to other famous bubbles in history: the 1929 crash, Gold, South Sea Company, Mississipi Company, and of course, the Tulip Mania in 17th century the Netherlands. The much-disputed race for the largest speculative bubble in history certainly has a winner: Bitcoin. The digital currency was able to almost multiply its value by 60 at its peak. That is 150% the price of tulips at their ‘best’.
That was an impressive chart, but does it serve as proof that Bitcoin is a bubble and that it has burst? Of course not. I imagine they claim the bubble has burst because Bitcoin has dropped over 65 percent from its December peak. But how severely should we take such light analysis? Any individually than the Economist story in 2011? Or the CNN story in 2013? Or the CNN story in 2015?
“BITCOIN, quickly the world’s favorite cryptocurrency, is in crisis. It plunged from a peak of around $33 per unit in June to just $2.51”, stated the Economist on a piece called “The Bursting of The Bitcoin Bubble” in 2011.
CNN’s “Bitcoin Bubble May Have Burst”, dated 2013, makes a comparable point. “The price of Bitcoins has jumped more than 70% in the past two days, sparking a rush of activity that won trading platforms and suggested the bubble in the virtual currency has broken”, it said.
In 2015, the news agency explained it didn’t learn the first time: “Bitcoin lost more than 60% of its value last year. The digital currency has previously plunged another 30% in the first few days of 2015 — and that includes a 30% rebound on Thursday!”, told CNN in its article entitled “Will Bitcoin Ever Rebound?”.
I just selected these three pieces at random. The list could go on and on. This suggests me to David Meade, a Christian numerologist who requires the end of days is on April 23, 2018. Who knows, maybe this time he’s right.