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Oversupply of Bitcoin Will Burst the Bubble?


Nov 30, 2017 Posted /  3749 Views


Oversupply of Bitcoin Will Burst the Bubble?

Bitcoin has been labeled by many as a transformational currency which can disrupt various industries in the coming future.  Nevertheless, many others compare it with the Tulip Mania in Holland in the 1630s and hence has been termed as Bubble. Also, one of the remarks by Warren Buffett is doing the rounds on the internet  where he mentioned Bitcoin as “a real bubble.

It is noteworthy that the most disruptive advancements in the inventions, technologies, and finances have in the recent past been inflated into a speculative bubble. At the same time, investors and traders can hypothesize that the complex values of these new upsurges can definitely elevate in the coming years.

However, the latest scrutinization and evaluation in the supply and demand of the bitcoin depicted that the Bitcoin bull run ended because of the overabundance of suppliers. The analysts are suggesting that the Bitcoin and the hard forks are searching for the different ways to generate supply.

The resultant evaluation comes from the analysis of the dot-com bubble of the 1990s. At that time the companies which included the .com in their name got instant popularity and brand value. Nonetheless, .com IPOs overwhelmed the market only to construct unstable business structures. This overpowering and flooding burst the bubble and in the correction process, only strong-willed business houses survived.  

The 21 million mark and the oversupply

All Bitcoin enthusiasts are aware that Bitcoin has a limited supply i.e only 21 million will ever exist. If it is right then how could an oversupply ever occur?

For someone who is remotely familiar with Bitcoin, this could be a bit confusing. But the answer to this question can derive multiple answers. First of all the Bitcoin hard forks are in the stage of developing new derivations from the original model of Bitcoin. For instance, you must be familiar with the Bitcoin cash, Bitcoin Gold and Bitcoin Diamond hard forks. These hard fork has been able to suspend a completely new Bitcoin with higher values in the marketplace.

The tulip mania or the dot-com bubble might have entered the speculation stage, where it resulted in a degrading pitfall. But the market reports for the Bitcoin are completely opposite and the emergence of Bitcoin Future has provided the much-needed hype of “an amazing idea” to the company. Although, the multifaceted channels of investment that once elevated the price of the Bitcoin can make it lower faster than expected if the oversupply continues.        


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Tags: real bubble bitcoin Bubble

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