Is Bitcoin in a bubble?

Opinions, and that is all they are, on this topic vary as much as the definitions of a ‘bubble’.

Bubble as 'pricing being significantly more than fair or intrinsic value'
For bitcoin, an item that provides no economic return nor directly addresses any human needs or wants, the intrinsic value is determined by what people are prepared to pay – a bit like the value of celebrity. While this pricing logic is a truism, it does provide an argument that bitcoin is not in a bubble: it is not above the price people are willing to pay; it is at the price people are willing to pay. Of course, conditions on specific exchanges (and market manipulation) can temporarily push prices beyond current fair value but they correct rapidly.

Bubble as a rapid rise in price
Bitcoin is still small so it is very easy to grow quickly so such a definition is mute at this time.

Bubbles pop
While one can articulate various threats to bitcoin, they seem unlikely to manifest in a timeframe meaningful to the price rise. While the price is rising, this increases awareness and demand. The supply is fixed (and will probably decline through human error) and the tendency is for many owners to HODL. As the current population involved in bitcoin is small and its economic performance is outpacing alternatives then there are many ingredients for continued and extraordinary growth for many years until interest subsides.

The tipping point will be reached when the market penetration reaches its limit. With 20 million addresses used (at time of writing) and taking an assumption that a person holds 4 addresses, then only 5M people hold bitcoin, less than 0.1% of global population. Extrapolating the doubling of addresses annually, in 5 years (2022), bitcoin addresses would be over 600M, representing 1-4% of the population which is still small minority. This points to significant opportunity for growth well before a saturation.

Bitcoin cannot be considered a bubble as its increasing price is driven by its popularity and that is still in its infancy. The relationship between price and popularity means that the popping of price needs to be related to decline of popularity and typical examples in the past (think celebrities) imply a type of S curve followed by long period of decline where price is maintained by those that will never give it up.

Constructive comments welcome!