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When will the explosion of the Bitcoin bubble?

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December 24, 2017 | 

1251 Views | 

Joanna Newman | 

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Many economists believe that Bitcoin is a bubble that will soon explode.

Many have compared it to the financial bubbles that preceded it in history.

But even for those who defend this thesis, it must be admitted that there are many differences with the preceding cases.

This is what the Canadian economist Joshua Gans explains.

Bitcoin is not a bubble like any other


Bitcoin is not a bubble like any other


  1. First of all, the key difference is that Bitcoin is totally digital. And this is a first.

In all previous cases, it was not a completely virtual product.


  1. Secondly, this bubble is a bubble on a global scale. Pure product of globalization. Anyone, anywhere in the world, can buy Bitcoin. And for that, no more banks or even a broker.

  2. Third, if Bitcoin collapses, there will be no other investments that will suffer the effects.

At the moment, investors are not using much of their savings to buy bitcoin. And so, there is little chance that the bursting of the bubble has repercussions on the financial world. Especially since the volume of transactions, although amounting to billions of dollars, represents only a small percentage of all global monetary transactions.


  1. Another particular point in Bitcoin, transactions are much more transparent than for stock market shares. Because unlike stocks, it is possible to track the purchases of all investors, from the smallest to the largest.

  2. Another difference is that it is possible to buy very small amounts of Bitcoin

No need to invest thousands of dollars in cryptocurrency.

6. Finally, last point, the slow execution of transactions. Which means that this market is not responsive to the speed with which we have become accustomed to other stock markets.

Does Bitcoin have points in common with previous bubbles?


So there are many differences between the supposed Bitcoin bubble and the previous financial bubbles.

The only common point that can be recognized is the familiar vanity of other bubbles. Because the reason why investors are turning to Bitcoin today, is only to make more money tomorrow. This is what makes investment in cryptocurrency very much like playing at the casino.

When will the bubble burst?

So what will blow up the Bitcoin bubble?

First possibility, that the whole Bitcoin system collapses.

Second possibility, most likely: a big wallet decides one day to sell its Bitcoins to convert them into hard currency.

And it is this sale that can trigger the collapse of the virtual currency.

But one thing is certain. When this collapse occurs, it will be a very interesting phenomenon to study for financial bubble specialists.

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