Is Bitcoin a Bubble? Not according to economics.

First off, what is a bubble? Simply-put, it's when economic assets are grossly overvalued. Like when a useful or valuable thing (aka "an asset") is not in line with its intrinsic value (determined via financial analysis e.g. statements, competitors, and markets) you get a "bubble." Assets like companies, stocks, real estate, and products all have intrinsic value. For example, stocks representing equity shares have an intrinsic value determined by cash flow and the value of ongoing operations while real estate's intrinsic value is based on future net cash flow including rent, inflation, maintenance, and property taxes. Needless to say, we've all seen what happens when any of these assets experience a bubble with the ".com" crash in the 90's being among the more notorious bubble-bursting-events.

But cryptocurrency, like gold, has NO intrinsic value

Bitcoin and other cryptocurrency prices are fueled entirely by demand and demand is fueled entirely by ONE very important question: Will blockchain technology, cryptocurrency's decentralized digital ledger, be around in 50 years? The answer is a big, fat YES. If you think otherwise well then you're not as smart as you look.

Now, that's not to say that cryptocurrency prices won't be a roller coaster ride in the meantime. Despite blockchain's inherent longevity, cryptocurrency is undeniably volatile. But then again, the technology is not only new, it's evolving and changing every day so perhaps take a moment to remind yourself that cryptocurrency is NOT stock and shouldn't be treated as such. For newbies who want to "invest," your best bet is to find blockchain-based projects and companies whose ideas and team you (personally) want to support then take advantage of their ICO (initial coin offering). But don't mortgage your house or trade your life savings for Bitcoin, Ethereum, or Ripple. And be hyper-aware of ICO scams.

Cryptocurrency investment thesis:

The price is not as important as the project— buy projects. The people talking about it are not as important as the people working on it— buy teams. The attacks are not as important as the responses— buy antifragility. - David Doswell, Some Guy on Twitter (but he's right!)

Blockchain technology is still in its infancy and I assure you that in 10 years, things will look VERY different. Bitcoin, currently the king of the blockchain and at the center of this "bubble" debate, could very well lose out over time to "superior" technologies like Dash or Litecoin. But that's not to say that its alleged bubble burst, it is merely blockchain evolution. And while many financially-savvy crypto enthusiasts continue to make unimaginable gains with early crypto investments, blockchain & cryptocurrency are designed to be a virtual, decentralized and secure means of value exchange---not a stock market. So proceed with caution.

To reiterate, Bitcoin and cryptocurrency aren't any more of a bubble than the constantly fluctuating price of gold EXCEPT cryptocurrency has the added value of being weightless, highly secure, extremely portable, and easily distributed anywhere in the world.

Cryptocurrency, in essence, is digital gold. It has value because millions of people value the promise of transacting in the decentralized, democratic, transparent, efficient and highly secure network that is blockchain.