Hey steemers,

As soon as the speech comes to digital currency such as Bitcoin, the narrative among financial experts often goes like this: Such a crypt diet consisting of an encrypted series of numbers that does not fulfill all the important functions of money and which hardly anyone understands will disappear sooner rather than later. Survival is only the technology behind Bitcoin, the data chain Blockchain. It is a good way to make many processes easier, faster and safer, and thus change the entire financial sector in a sustainable manner. In the meantime, however, it becomes clearer and clearer that this market-based assessment reflects only half the truth. For all reminders, Bitcoin is not toughened. On the contrary. In the ninth year of its existence, the digital currency is increasingly becoming the focus of investors.

After its introduction in 2008, Bitcoin, which consists of a code of 51 characters and is created by private users and computer networks all over the world, was initially enthusiastically welcomed by technology freaks, anarchists and libertarians. They reject the monetary and monetary manipulation created by central banks from above. In the meantime, however, a large number of people can be persuaded to see in the digital currency a financial investment of the future. Many of those who have spent months on the Bitcoin and are pushing their value to unprecedented heights, however, understand at best what the currency is and how it works. Such a thing can be called a hype or a bubble. And one can ask oneself: Have these investors been mistaken?

Value growth of 600 percent

While in the world of real foreign exchange it is debated why the euro has grown by 15 percent against the dollar this year, hardly anyone in the digital world is astonished that Bitcoin has gained 600 percent of its value within a year. Recently, a bitcoin has been worth more than 5000 dollars for the first time, 16 times as much as in early 2015. And because bitcoin is a kind of digital reserve currency, similar currencies as ether and ripple were dragged along. A total of 15 billion dollars investors have invested in the ten largest cryptic investigations alone in the previous week.

And the share prices of companies that make their money with digital currencies are also moving upwards. The share of Bitcoin Group SE, which operates the only regulated Bitcoin exchange in Germany, has won more than 600 percent in the past three months alone. On some days of the previous week, it was even the most traded value on German stock exchanges - before the Dax companies like Daimler, Deutsche Bank and Siemens. The Bitcoin Group, which generated sales of just EUR 1.13 million last year, is currently trading at around 260 million euros. Such movements and assessments as at the moment around the Bitcoin are suspiciously reminiscent of the Neuer Markt, which led investors around the turn of the millennium to bold dreams and then ended with an evil awakening.

There is no shortage of reminders before a bitcoin bubble: central banks and supervisory authorities, which tolerate the trade in cryptic payments, are also warning of the "speculative object" like the Bundesbank and highly decade economists, whom Bitcoin is also unwelcome. As "Warner Brothers", the alliance of skeptics is ridiculed by the Bitcoin community. But it is not easy to compare comparisons between the erratic bitcoin boom and financial bubbles such as the tulip mania in 1637 and the Internet bubble in 1999.

Government and banknotes are not liable for the currency

Finally, unlike the traditional money, neither governments nor banknotes guarantee the private currency. "Naive" was therefore all those who put a lot of money into Bitcoin, the American starinvestor Howard Marks wrote recently to the customers of his asset management Oaktree Capital. Buying something without worrying about the value and the reasonable price is nothing but a goat that follows a fashion.

Even star economist Robert Shiller, like Marks beyond the 70 and thus no child of the digital age, recognizes a bubble. Too many people are fascinated by the Bitcoin story, which begins with the mysterious inventor Satoshi Nakamoto and ends up in a digital uncertainty, said Nobel Prize winner Shiller these days in an interview. Shiller's word is always heard, as he is one of the leading researchers on the development of capital market prices. But his reminders before a bitcoin bladder are not heard by all.

Investors just keep buying. Why they do this can not be explained at all. Unlike traditional currencies, the value of Bitcoin develops independently of inflation and growth expectations; a monetary policy does not exist in the decentralized system. One possible explanation for the hype is that the Japanese central bank has acknowledged bitcoin as an official payment in spring. Since then, Japanese have been able to pay more and more in the digital currency and have replaced the Chinese as the most eager buyers and sellers in the world on the Bitcoin exchanges. The Australian bank is also on the verge of allowing Bitcoin and not only to tolerate it.

Investors react demonstratively relaxed

Great video from @ameer with some reason and when Will Cryptocurrency Go Mainstream. I really like his thinking:

The fact that massive demand for Bitcoin is currently causing a bubble, for whatever reason, is not even denied by those who make money with the trade of digital currencies. However, they do not react with alarmism, but demonstratively relaxed. Blowing, says Oliver Flaskämper of Germany's only regulated exchange Bitcoin.de, the digital currency in its history already some behind. They were bogged down as criminal hackers, connections to the virtual drug scene, or bankruptcy of bitcoin brokers. "There will always be exaggerations and corrections," says the German stock exchange manager Flaskämper, "but the fluctuations are weaker." Kurbreaks of 30 per cent or more, which were still common a year or two ago, have been passé. The lower volatility is also the result of the fact that many countries have begun to regulate bitcoin and thereby make the market more transparent. However, the fluctuations remain high compared to other currencies, says Bielmeier. For investors looking for a reliable financial product, Bitcoin remains unsuitable, a true devil toy.

On bad news, which could have caused the Bitcoin course to crash, has not been enough in the past months. At the beginning of August, a long-running quarrel in the Bitcoin community ended with a split. Since then Bitcoin has also been providing Bitcoin Cash as a digital currency. Before the spin-off, it was assumed that there would be a sharp downturn and a lasting loss of trust. But the opposite happened: After a temporary correction, the Bitcoin course rose to new record highs. Even when the Chinese central bank talked a few days ago and forbade companies to procure funds through newly created digital currencies, the investors only briefly shrugged.

Let me know what do you think about it, do we are really in a bubble?

Become a self-citizen of the world!

Happy steeming

Francesco