Within the past 12 months, the price of Bitcoin has increased from less than USD $800 to more than USD $12,000. The momentous increase in value caused many to question if it is a bubble or if the high price of today is here to stay.
The financial definition of a bubble is a situation where the price of an asset deviates systematically from its fundamentals. Investment mogul, Jack Bogle, believes that there is nothing to support Bitcoin and Jamie Dimon, the head of JP MorganChase, has stated that it is a fraud “worse than tulip bulbs”.
Bitcoin does have some fundamental value like any asset, even if it is only a hope value or a value arising from scarcity. And so, there are reasons to hold it. According to sources, research shows that is is experiencing a bubble right now.
Europe’s financial regulation chief has stated that EU authorities are researching ways to tighten their oversight of the growing cryptocurrencies market.