"Bitcoin Bubble? Or, Bitcoin $1 Million?"

Lately, any article you read on Bitcoin mentions the Tulip Bulb Mania from the 17th Century. I find that a lot of the naysayers have nothing constructive in their rationale as to why they dismiss the cryptocurrency. With the selling after last week's all-time high, the tulip bulb burst scenario appears to play into these individual's outlook. But, Bitcoin is no tulip bulb and whenever the cryptocurrency does come off a new, all-time high, it invariably makes another. The latest move downward is no exception; Bitcoin will run up again and hit all-time highs once more.

Bitcoin is Nothing Like Tulip Bulbs

What separates Bitcoin from tulip bulbs is simple: Supply. If mankind wanted to increase supply of tulip bulbs they would simply propagate as much as they wanted to. Given that, supply of tulip bulbs can double in any amount of time thereby rendering the store of value in tulip bulbs to minuscule levels. This is largely the reason for the eventual pop in the Tulip Bulb Bubble.

With Bitcoin, the supply is eternally set. There are 21 million coins. There will only ever be 21 million coins. There will never be more than 21 million coins.

Because of the limit on supply, whenever anyone wants bitcoins, they have to sell their local currency and purchase Bitcoin from an exchange. That purchase pushes up demand, which, invariably, pushes up price. The continual price increase is one of the draws to the currency as speculators look to get in to an asset that is generally rising unabated.

The unabated rise in price is where Bitcoin's store of value is derived. Bitcoin has the ability to be exchanged for other currencies. And, the cryptocurrency's continual rise means that it is able to be exchanged for greater amounts of other currencies. This is one of the biggest appeals to Bitcoin.