Why Bitcoin is NOT in a bubble

Bitcoin may have it's issues, which are well documented and discussed throughout the crypto community. But being a bubble is NOT one of them.

https://en.wikipedia.org/wiki/Economic_bubble#Identifying_asset_bubbles

An asset bubble is identified by the following factors:

1. Unusual changes in single measures, or relationships among measures (e.g., ratios) relative to their historical levels. For example, in the housing bubble of the 2000s, the housing prices were unusually high relative to income. For stocks, the price to earnings ratio provides a measure of stock prices relative to corporate earnings; higher readings indicate investors are paying more for each dollar of earnings.

This is pretty much null and void. Bitcoin is divisible into 8 decimal places (for now) so the barrier of entry that would be seen in something like housing (where people need to borrow multiples of their annual income just to buy one house) is non existant. Somebody can theoretically enter the bitcoin market by purchasing a couple of satoshi's instead of buying a coffee.

2. Elevated usage of debt (leverage) to purchase assets, such as purchasing stocks on margin or homes with a lower down payment.

Borrowing to purchase bitcoin is not a common practice. Banks won't lend for the purpose of investing in cryptocurrency as they do for margin lending and mortgage for other financial instruments. The only way somebody can invest borrowed funds into crypto is by not telling the bank the purpose for the funds and not securing their loan against the asset. Which means even if a person defaults on their loan, they can still keep their coins.

3. Higher risk lending and borrowing behavior, such as originating loans to borrowers with lower credit quality scores (e.g., subprime borrowers), combined with adjustable rate mortgages and "interest only" loans.
Rationalizing borrowing, lending and purchase decisions based on expected future price increases rather than the ability of the borrower to repay.

Again not relevant to crypto. see previous point reasoning.

4. Rationalizing asset prices by increasingly weaker arguments, such as "this time it's different" or "housing prices only go up."

This is probably the only similarity between an asse bubble and bitcoin.

5. A high presence of marketing or media coverage related to the asset.

Most of the media coverage related to bitcoin is covering it's volatility and the opinion that it's growth is not sustainable. this if anything will help quell the "bubble".

6. Incentives that place the consequences of bad behavior by one economic actor upon another, such as the origination of mortgages to those with limited ability to repay because the mortgage could be sold or securitized, moving the consequences from the originator to the investor.

Not Applicable

7. International trade (current account) imbalances, resulting in an excess of savings over investments, increasing the volatility of capital flow among countries. For example, the flow of savings from Asia to the U.S. was one of the drivers of the 2000s housing bubble.

The single currency nature of bitcoin means this is not applicable. we're all in the same crypto economy. It's not about one economy arbitrarily propping up another.

8. A lower interest rate environment, which encourages lending and borrowing.

Again null and void, given that lending for crypto doesn't happen too often.

Further to the above points, I believe that the demand of bitcoin and the wider cryptocurrency market is virtually untapped. There is a MASSIVE market of people who have not invested in cryptocurrency simply because they don't know it, or don't understand it, but there is no barrier preventing them doing so. Just wait until adoption in non western countries starts to increase, as confidence in the local banks is eroding, people will be looking for places to park their fiat.

In Egypt for example, bitcoin exchanges have recently launched. Adoption hasn't quite taken off yet - people are still either keeping their cash underneath their beds, or investing into property to keep it away from the banks.

Interesting times ahead.