Summary of Digital Coin Bubbles

Summary of Digital Coin Bubbles

Digital currencies have seen incredible growth in prices since the beginning of 2017, prompting many to question whether their market value exceeds their intrinsic value.

When this happens, traders push the price of the asset to high and unsustainable levels which creates a financial bubble, this pop bubble inevitably brought potential destruction to those who bought at the top.

Speculative bubbles can also discredit the whole market sector, leading to the long-term bear market (the term currency is largely a trap), with traditional investors staying away

The ships are carried out in a windy manner

The digital currency market has seen strong price growth over the past seven months, most of which have been occurring since May.

Where some currencies such as Petequin witnessed relatively modest growth and other currencies such as (xem, xrp, bts, dgb) saw price increases much more dramatic than the beginning of 2017.

We can see that the price of Bitquin rose to a peak of only 290%. Where it can not be compared with the nem currency which rose by 8156% and bts currency by 11480% until the Dog Coin currency rose by 1625% through the news industry at the time.

This growth is certainly historically unsustainable. These dramatic increases in asset prices over a short period of time have created bubbles.

 

Different approach

 The rapid rise in currency prices has led many experts to call it a bubble and warn against investment.

Others argue that the digital bubble is impossible because of the theory of market polarization according to George Sorce and market conditions are reflective because of the synchronization and manipulation of cognitive functions.

Cognitive function is where economic participants assess the facts of what they are. On the other hand, the function of manipulation becomes one or two truths in order to gain an advantage. Once the mind is affected by the manipulation of neutrality, drawing in a different light becomes a reality of manipulation.

Markets therefore reflect the participants' view rather than the full range of the economy.

Historical examples

The first known bubble in history is the Dutch Tulip Mania. While Dutch traders sold futures contracts, prices varied rapidly from the basic value of the actual asset.

Traders began buying futures on the tulips not because they wanted lamps but thought they could sell their contract later at a higher price than they paid.

Traders' obsession with the value of one bulb exceeded the value of a luxury house in Amsterdam, and after new buyers have stopped entering the market, the price of the lily has collapsed to pre-bubble levels.

Eiffel tower

It is an expression of the chart's drawing of any bubble-shaped currency where the bubble swells rapidly and forms what traders point to on the Eiffel Tower. This pattern is seen when the price of the asset increases exponentially and rises to its original price at the same speed.

This figure is like a two-dimensional image of the Eiffel Tower as the graph of the total market value shows that the digital currency sector seems to have reached its peak and is falling rapidly and the massive rally took about two months, so the return to the average is likely to take the same amount of time.

When you see the Eiffel Tower on the chart exit the market

There is no certainty that the digital coin bubble has emerged yet but seems likely to have emerged.