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RE: Charts don't lie: Bitcoin is in a bubble.

in #cryptocurrency6 years ago (edited)

good for you @farq. This is your definition:

"A bubble means the asset is basically dead and worthless/close to $0."

So I guess your mental image is that of a soap bubble, it inflates, bursts and it's gone forever.

This is the definition of a bubble on Investopedia:

"A bubble is an economic cycle characterized by the rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive sell-off occurs, causing the bubble to deflate."

You'll notice there is no mention of the asset becoming "worthless". Bubble=irrational overvaluation of an asset.

The mental image this definition conjures is that of boiling water, it boils and expands, gets agitated then calms... but the underlying asset (water) doesn't get destroyed.

So it's down to definition and again I don't think any of us is "closer to the truth" than the other or "more closely aligned to what the word is supposed to mean". So let's just leave it at that.

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