What is a Tulip Bubble
Lately there has been much hype by the Old Guard such as Jamie Dimon and even Ross Greenwood here in Australia saying that Bitcoin is in a "Bubble" much like that of the Tulip Mania, or Tulip Bubble.
But what exactly is the Tulip Bubble?
In the 1630's during the Dutch Golden Age, the Tulip was introduced and became extremely fashionable. The flower farmers couldn't keep up with the demand and as such the rules of supply and demand led to the very first speculative market. At the peak for the Tulip Mania, a single Tulip bulb for about 10 times the annual wages of a skilled worker.
Tulip bulbs had a meteoric price rise over a very short period of time, which lead to many investors overcapitalising on this commodity. There are reports of 1 person trading 12Acres of land for 1 bulb.
This all came to a head on Feb 3 1637 when the price of tulips crashed back to its original starting price. This left many investors with a major loss and having to declare bankrupcy.
Financial "experts" have been drawing similarities with Bitcoin due to its rapid rise in value. I can see where these people are coming from but I can't agree with them. I can see corrections ahead for the price of Bitcoin but as it becomes more popular and gains more traction within the domestic marketplace that price will continue to rise to a point that it settles and becomes much more stable.
Its very hard to know who to listen to as everyone who reports on these topics have their own agenda. People like Jamie Dimon don't want money flowing into a currency that he can't control. The government and banks don't want to loose their fee's and taxes. Similarly, Crypto enthusiasts don't want to hear any negative press. I'm sure there is a middle ground somewhere but I haven't found someone that preaches sensible middle ground unbiased opinions.
Thanks for reading, Be sure to tune in later this week, I've got a good post planned to celebrate a milestone, and I only need 10more followers to crack 800, lets clear that hurdle this week.
Personally I think tulip mania will come back and I've sunk all my savings into them. I have a dry storage filled to capacity just waiting for the spike. You wait..
I have a whole bunch of fresh photos of tulips. I could sell you a couple pictures!! 100% genuine and original ;-}
there you go mate.. I learnt something.. Ive never heard of the Tulip Bubble - mind you they are very pretty lol :)
Do not think cryptos are a bubble and in the extremely rare case in which they exploded like a bubble it will still have a solid market cap.
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Very interesting Gohba! I wasn't sure what I was walking into but I'm glad I took a shot now! Thanks for that!
Can't quite understand the comparison really. Tulips have a limited life (they die), but you'll always have Bitcoin. Once they died and the next "in fashion" item came around it was tickets for the tulips and the high price. Digital currency is here to stay, and so may go up and down with demand and supply cycles. The only thing that could burst the bubble would be a change in the law... but I don't think that would stop it.
Following you now, Gohba. 9 left to go.
thanks Matt!!!
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