Bitcoin has made headlines as a surging cryptocurrency over the last few months, but economists believe these gains are fueled by speculation. The Wall Street Journal surveyed fifty-three private-sector economists, and fifty-one of them (96%) say Bitcoin is experiencing a bubble.
Bitcoin advocates believe that the startling price growth comes from recognition of its value as a global currency and decentralized, novel blockchain technology. Mark Nielson of MacroEcon LLC believes the price of Bitcoin will increase to $45,000 over the next two years, as it recently receded from $19,000 and currently hovers at around the $15,000 price mark.
If it looks like a duck, and quacks like a duck, it’s a duck.
On the other hand, economists such as Diane Swonk believe otherwise. Swonk, founder of consultancy firm DS Economics, stated, “If it looks like a duck, and quacks like a duck, it’s a duck.” Additionally, Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, claims “Bitcoin is nothing more than crypto-tulip bulbs,” citing the Dutch tulip mania occurring in the 1630s.
What do you think?
- Could Bitcoin be a bubble? Why or why not?
- As of today, is Bitcoin a wise investment?
- What are some examples of bubbles that have bursted in the past? Do all bubbles cause damage to the broader economy?