Michael Hartnett, the chief investment strategist at Bank of America Securities called Bitcoin, the ‘mother of all bubbles’ on January 8th, 2021.
Bitcoiners have had a bumpy ride since the coin came to life in 2009. The poster child of cryptocurrency had a spectacular price surge at the start of 2021. It rose to $40K within a week after breaking out of $30K mark. The adrenaline pumping bull rally was nothing short of surprise for many. But, it was a deja vu for crypto analysts.
Bitcoin hit an all-time high in 2018. Subsequently, it never hit the same mark again for more than 2 years. The currency is also having a moment as we write this. Google trends show a surging interest in the term ‘bitcoin’. Additionally, both institutes and individuals are increasingly investing in bitcoin.
Despite all the buzz around BTC, Mr Hartnett of BoA still believes that bitcoin is ‘the mother of all bubbles’. The surge of roughly 1000% since 2019 is a result of ‘speculative mania’ in his opinion. He didn’t say whether the price will plunge or not.
Is Bitcoin Really A Bubble?
The short answer is, ‘we don’t know yet’. The eruptive price movements of bitcoin are truly unmatched in the history of finance. Fame and discourse on BTC do play a role in deciding its value. Nonetheless, the benefits of currency are also a factor for its popularity.
Bitcoin, in most cases, offers what traditional assets have failed to offer. It is open-source, verifiable and decentralized. No governmental authority or institute can inflate or deflate its value. You can trade it, buy stuff with it and store it without any logistical effort.
In many senses, bitcoin is the ‘digital gold‘. But, it is also unpredictable due to a small number of investors. Only the course of coming years can tell us where bitcoin will stand. However, smartly investing in it is the right choice for the moment.
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