Prepare For The Next Bitcoin Bubble | Buckle Up and Enjoy Your Ride

published on August 2, 2020

Hey what's up guys bitcoin is very volatile indeed it can easily drop by 80 percent at any given moment however throughout the history it has formed many market bubbles and 2017

Was definitely not the last one in this video i will explain why bitcoin is forming another bubble beyond your wild imagination this video is brought to you by itrustcapitalcom

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Code aimstone to receive one month free the entire cryptocurrency market had a nice increase in the past few days bitcoin has been fluctuating around nine thousand

And nine thousand two hundred dollars for a number of weeks and finally we see a breakout with bitcoin reached to the current price of nine thousand five hundred dollars i would like to see bitcoin at about ten

Thousand five hundred dollars for official breakout confirmation especially the second largest cryptocurrency ethereum increase in price in double digits it's a spike from 240 dollars all the

Way above 270 dollars a coin as a current price and it reached new highs since the devastating drop four months ago when this illness reached the united states and the economy went into

Deflationary state according to a report from exchange cracking bitcoin is just a 10 jump away from entering a massive upwards trend as kraken describes in order to enter

The bull market bitcoin needs to break the important resistance at ten thousand five hundred dollars level as shown in this chart in this sense the report says that bitcoin should break

The resistance soon or risk testing the support of six thousand to seven thousand dollars of course it's better if bitcoin will break that sentimental 105 k and continue its bull market run but i

Also would not mind if bitcoin will pull back to six thousand and seven thousand dollars in the short term it would provide me and other cryptocurrency investors to buy in

At discounted prices if bitcoin breaks that 75 k this would end at time range that some analysts have called it a very stable period indeed this is similar to the price

Development as we have seen in late 2016 and early 2017 when bitcoin was fluctuating around one thousand dollars for a long period of time

Usually explosive moves come when people expect the least initially bitcoin trended sideways for some time and ultimately reached its all-time high at twenty thousand dollars

Towards the end of 2017 bitcoin's fundamentals seems to support a bull market bitcoin cash rate has been on the rise since the difficulty adjustment in june according to blockchaincom bitcoin's

Cash rate reached new all-time high on july 7th at 125 zero hashes per second after that it's lightly pulled back to 113 hashes per second but it still remains in those high

Levels despite that bitcoin worth drop in half currently not many miners can remain profitable they generate twice less bitcoin profit than before the bitcoin heaven event but they

Continue mining despite bitcoin's price being under 10 000 i think they're doing this because they believe in the future bitcoin will be much higher in price so

They can capitalize on mining rewards and secondly they want to support bitcoin network to keep the bitcoin alive the more days bitcoin survives the longer its winning streak

And the stronger the network becomes just recently i have seen a great episode on on-chain podcast where neil ferguson and mulban casey explain why bitcoin will bubble up again

Let's take a look the volatility of bitcoin as a as a financial security which is how it sometimes appears to uh to behave uh is the proof of that what you're seeing when bitcoin's price

Fluctuates wildly as it's done uh in the last five years uh is not variations uh in the supply of us dollars uh these are fluctuations in expectations of investors about the

Future of bitcoin and as we all know as everybody listening to this uh podcast knows uh those those fluctuations have been enormous because there's great uncertainty about

The future of bitcoin it only seems like the other day that an influential economist nouriel roubini was calling bitcoin coin and predicting that it would go to zero it's not that long ago that the nobel

Prize winning economist and new york times columnist paul krugman was dismissing uh bitcoin in much the same way that he once dismissed the internet as a kind of nothing burger and so there's all kinds of confusion

Uncertainty uh and downright error about the future of this particular instrument and that's why we will have another bitcoin bubble at some point i

Can guarantee that uh and during that whole cycle which will be what the fifth i've lost count of the big bitcoin bubbles there have been there'll be the same debate that we have

Back in 2017 between the people who say it's going to the moon and the people who say it's point it's going to zero and both of these views will be wrong over time i think bitcoin will cease to

Behave like an option i think it behaves like an option on digital gold right now a term that i owe to my friend matthew mclennan at first eagle gradually over time

The longer it survives and the more useful it appears to be a bitcoin will behave less like an option on digital gold and more like digital gold i take the view and i'm probably going

To annoy a majority of listeners now that bitcoin isn't going to become money in the sense of the means of payment i think bitcoin is a peculiar kind of digital gold that people will want to

Hold in their portfolios because it has behavior different from other asset classes and it's not uh closely correlated with them and i think the more people who take the

View that bitcoin will live that roubini is wrong the more uh people will hold it in their portfolios and that preference for bitcoin as an asset with uh diversification quality uh will

Push up its price uh its price will not go up gradually it will go up in steps uh and each step will look like a bubble and each time the bubble bursts nouriel roubini will say

You see you see and i'm healed wrong look on the babbles especially i just think also i love this this idea that this price levels are always a reflection of this kind of

I suppose waves of expectations and we go through these cycles where expectations are very bullish and then expectations are very bearish and that sets the price level so i mean it's

Interesting to think where we are in this position where it's period where we're not seeing any inflation in money but we are certainly i think seeing it relative to what would imagine the under

Underlying return on stocks right now there is has been significant asset inflation certainly since the bottom of the post covered uh you know moment if you like in march because there is this expectation that

Somehow this return on assets is going to to be higher at least denominated in the money that where that's being issued against it um so but the thing about bubbles that i

Find also important there's we had carlota perez who's a very interesting uh thinker around innovation cycles and bubbles as a speaker at uh consensus uh

Neil was also a speaker at consensus back in in may and and she's i think takes this sort of big step back view of what a bubble is and it's this uh is this perspective how about whereby

You unlock innovation uh by by bringing this sort of this this speculative moment actually then it gets invested into these moments of kind of

Almost like technological paradigms and there are different moments when a particular type of technology becomes uh the driver of this innovation wave and therefore the driver of all the

Speculation around it so we saw it in the dot-com bubble we've certainly seen it in blockchain we've certainly you know we've seen it in lots of other times so bubbles almost are necessary evils

Uh this idea that you you unlock all of this value you actually create a framework in which the underlying technology can be uh developed with a cheap currency which is

The high level of the of the equity attached to that particular thing so i don't know that that's a bit of a tangent but i think it's just an interesting way to think about things like expectations um with regards

To to sort of bitcoin and digital gold i actually just generally agree with what neil said i've i've never really thought that bitcoin could be money i'm not a

Metalist i don't i don't i really don't think that uh for one just this sort of hardly hard-baked scarcity function again this is going to annoy a lot of a lot of listeners but i i don't think it

Is the the most interesting innovation here the most interesting innovation to me is that is the governance of a of a of a ledger system of a monetary system for how we manage our debts debits and

Credits so the the the idea that uh bitcoin could become a global the global medium of payments strikes me as as very challenging in terms of its

Limits i very strongly believe that it is you know almost ideal to become a reserve asset for the digital age that it becomes

Essentially yes digital gold because we are living in a decentralized we have two worlds we have a centralized real world and a decentralized uh online world and we just have to look at how twitter and

Facebook grapple with who is actually governing this conversation right now to understand that that is the biggest challenge we have is this is this decentralized architecture

For our online existence uh and and bringing order to that just means censorship and control in a way that the internet doesn't want right we as the we as the citizens of the internet do not want censorship and

Control so what is our money going to be in that system right what is the underlying reserve asset for that system which we then build other other payment vehicles on and i

Think that bit bitcoin sits there as as something as the anchor potentially for that so you know digital gold at least if you go back to gold in its um

You know in its in in its role at some perspective it's an underlying uh a base layer for for money uh is is is one aspect of this i also think though that it's just gold has persisted throughout the the

Millennia as uh as as as if if bitcoin is a digital option on gold gold ic is an option on on chaos on on the breakdown of of a of whatever other monetary system exists

So i see bitcoin is kind of transferring into that world that it's always there as a backstop to to to a breakdown in in the otherwise you know previously functional monetary system

Volatility of bitcoin comparing to usd is definitely something that will scare many investors away especially all the release who planning to retire very soon personally i like volatility yes you

Might see your position dropped by 80 percent but at the same time it creates buckets of inefficiencies if you are clever enough you can capitalize on those deflated bubbles

And eventually make lots of money honestly most of the people are scared seeing their position drop by 80 percent and i don't blame them it's another human nature to run away when we see the danger

But if you want to be superior investor you have to be a second level thinker you have to be aware of other cognitive biases and act accordingly when right opportunities knocks at your door

I agreed with niall that we will see another bitcoin bubble eventually it's just a matter of time we had a number of bitcoin bubbles in the past when bitcoin was much younger

It's once it's well we had two bubbles then in 2013 we had another bubble then in 2014 bitcoin bubbled up again but it dropped lately by 80 percent that the most famous bubble at least in

Recent history took place in 2017 when bitcoin went up 20x in less than a year so we had one massive bubble in 2014 than another massive bubble in 2017 that's four years apart now we're on

2020 and bitcoin already slightly recovered after 2017 bubble momentum and bitcoin can be very explosive hopefully sometimes in 2021 which is

Four years after 2017 we will see another peak at the new and much bigger bitcoin bubble one hundred thousand dollars by the end of 2021 that's a 10x from here it's definitely

Realistic if you look at how bitcoin was performed historically after the bubble bitcoin will most likely pull back by 70 or 80 percent one sec as dial mentioned that

Over time bitcoin will behave as an option on digital gold and as time passes by bitcoin will behave more as a digital gold itself what he's trying to say here is as bitcoin survives over time

It will attract larger and larger pool of capital and eventually price will stabilize and become less volatile just like vc in real physical gold but until then buckle up people and enjoy your ride

Bitcoin may not be the main mean of exchange globally as currently fiat currencies and that's okay it does not have to be gold is not the main mean of exchange

And look where the gold is at today it's close to 1 900 per ounce it's just a few bucks away from its 2011 all-time high gold's current market cap is 9 trillion dollars

Just for comparison because market cap is 175 billion that's a 51 times less than gold so bitcoin definitely has a huge advantage over gold in growth capability

Gold could probably go from here 4 5x in foreseeable future and bitcoin has the potential to go 50 or even 100x keep in mind guys this is not a financial advice

You can do with your money whatever div you wanna do but my bet is on bitcoin let me know what do you guys think about the next bitcoin bubble could it be in 2021 leave your thoughts in the comment

Section below hit that like button and subscribe

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