{"id":29505,"date":"2018-01-08T21:00:58","date_gmt":"2018-01-09T02:00:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=29505"},"modified":"2018-01-08T21:00:58","modified_gmt":"2018-01-09T02:00:58","slug":"bitcoin-isnt-the-bubble-the-global-financial-system-is","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=29505","title":{"rendered":"Bitcoin isn’t the bubble \u2014 the global financial system is"},"content":{"rendered":"

Bitcoin isn’t the bubble \u2014 the global financial system is<\/a><\/h3>\n
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\"Bitcoin<\/div>\n
\u00a9 Getty Images<\/div>\n<\/div>\n
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Pretty much every article you read about bitcoin in the mainstream press ends up in the same place. You may not hear it until the seventh or eighth paragraph, but eventually you\u2019ll be told that the whole thing is nothing more than a modern day “tulip bubble.” The more creative types will also throw around the South Sea or Mississippi Bubble. You get the point. The consensus among the very smart experts is unanimous: bitcoin is clearly and indisputably a gigantic bubble that\u2019s set to burst. I\u2019ve been hearing this since the early days of getting involved in the space back in 2012. But I\u2019m not convinced.<\/p>\n

For one thing, bubbles don\u2019t do what bitcoin has done since its inception in 2009. During my 10-year tenure on Wall Street, I saw several bubbles grow and then burst, and one thing you learn is that an actual bubble rises like crazy and then totally pops. It doesn\u2019t come right back a couple of years later and soar again to a new price 10 times greater than the previous bubble’s high, which is what bitcoin has done after each one of its three or four previous \u201cbubbles\u201d burst.<\/p>\n

That\u2019s not a bubble, but something else entirely.<\/p>\n

Let\u2019s take the oil price in the middle of the last decade as an example of a real bubble. The price went on a historic and seemingly unstoppable run all the way to $150 per barrel in 2008. It then proceeded to burst in spectacular fashion just ahead of the financial crisis, plunging all the way back to $30 before rebounding.\u00a0Ten years later<\/span><\/span>\u00a0and the price is still nowhere near that prior high, with it currently trading around $60. That\u2019s what happens when a real bonafide bubble bursts. It stays below the prior high for decade at least, sometimes forever. The behavior of bitcoin since the “genesis block<\/a>”\u00a0has been completely different.<\/div>\n<\/div>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bitcoin isn’t the bubble \u2014 the global financial system is \u00a9 Getty Images Pretty much every article you read about bitcoin in the mainstream press ends up in the same place. You may not hear it until the seventh or eighth paragraph, but eventually you\u2019ll be told that the whole thing is nothing more than […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[4174,1799,195,8444,317,6174,15519],"class_list":["post-29505","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bitcoin","tag-bubbles","tag-debt","tag-debt-bubble","tag-financial-system","tag-michael-krieger","tag-the-hill"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=29505"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29505\/revisions"}],"predecessor-version":[{"id":29506,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29505\/revisions\/29506"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=29505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=29505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=29505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}