4 ms·

I'm not sure how people are determining this is a bubble. There are roughly 12 million bitcoins in existence. Priced at $668, that means there is a mere $8 bi

I'm not sure how people are determining this is a bubble. There are roughly 12 million bitcoins in existence. Priced at $668, that means there is a mere $8 billion in the entire Bitcoin system. That's tiny. For a global currency with the unique advantages Bitcoin has, I would expect the currency to be in the $10s to 100s of billions soon enough. In order for bitcoin to actually matter, it needs to grow. You're going to get $668 bitcoins no matter what, if people start using it. That's simple supply and demand. Network effects being what they are, it's going to grow quickly. In order for Bitcoin to remain stable, it would need to grow slowly. Thanks to the Internet and the plethora of Bitcoin news lately, I just don't see that happening.

maxerickson 13y ago
The actual number of bitcoin actively trading hands is a lot smaller than 12 million.
Jtsummers 13y ago
I'm not sure it is a bubble (I see issues with bitcoin, but not the concept in general. Better cryptocurrencies seem possible.), but the total valuation is not evidence it isn't a bubble. A bubble really boils down to expansion beyond what the fundamentals support, and (only determined in retrospect) end in a contraction. While it's small scale, a $1 widget gaining widespread popularity and ballooning to $100 is a bubble if there's no real reason other than hype or artificial scarcity for it to reach that price. The total value of BTC being only 8 billion USD doesn't mean it isn't a bubble, it just means most economies will be unscathed should it turn out to be one.