Crypto Twitter took the news as an opportunity to mock the masses who thought bitcoin was a bubble. Here are two tweets that reflect the general sentiment.
Bitcoin in mainstream media:
2011 – “it’s a bubble”
2012 – “it’s a bubble”
2013 – “it’s a bubble”
2014 – “it’s a bubble”
2015 – “it’s a bubble”
2016 – “it’s a bubble”
2017 – “it’s a bubble”
2018 – “it’s a bubble”
2019 – “it’s a bubble”
— Dan Hedl (@danheld) May 14, 2019
Call Bitcoin a bubble just one more time…
Bitcoin: >10,000x, 10 yrs & ongoing, billions in liquidity
Tulip Mania: 40x return, 3 yrs start to finish, low liquidity
South Sea Company: 7x return, 3.5 yrs start to finish, low liquidity
— Blocktown Capital (@BlocktownCap) May 14, 2019
As Wade Barrett would say, I’ve got some bad news:
Bitcoin is still a bubble.
Motion is Not Progress
For all the great things happening with cryptocurrency, it hasn’t taken off.
Bakkt, a planned cryptocurrency mega-exchange from the company that runs the New York Stock Exchange, still does not have U.S. regulatory approval and doesn’t know when, or if, approval will ever come, despite announcing a new launch date of July 2019.
For all its 6 million users, Brave browser doesn’t even crack the top 10 most-used browsers (and only a handful of advertisers use its cryptocurrency). Most of Ripple’s “clients” say they’re just testing the technology. Steemit remains in beta after three years, and Ethereum delayed a network upgrade until mid-2020.
IBM hasn’t exactly set the world on fire with its blockchain solutions. Factom is still a tiny Texas company. Many smaller cryptocurrencies continue to fall behind on their roadmaps. And when the heck will Cardano finish ADA?
You still can’t buy coffee with bitcoin without taking a massive tax hit, and New York just dropped a bombshell about cryptocurrency exchange Bitfinex, accusing the company of $850 million in fraud. Almost all bitcoin trading volume is fake, and this most recent pump may have come from fraud and manipulation.
Which Comes First: Actual Adoption or the Bubble Pop?
If that’s too gloomy, I apologize. Clearly, bitcoin has gotten its mojo back and overall there’s lots of good news for cryptocurrency fans.
Lightning Network capacity is surging, and the number of bitcoin wallet users continues to rise:
On top of that, you have traditional investors and financial institutions entering the cryptocurrency markets. Yale, MIT, University of Michigan, Virginia’s Fairfax County pension fund, one of the Rockefeller family offices, and several other institutions have already publicly acknowledged they’ve bought a little cryptocurrency.
We also see traditional businesses entering cryptocurrency. Rakuten announced plans to open an exchange in Japan. Samsung, Facebook, and Telegram floated plans to create their own cryptocurrencies (JP Morgan created one earlier this year, and IBM has used XLM for a while).
Square reported a 200 percent increase in bitcoin transactions over the past year while South Korean crypto investors increased their holdings by 64 percent. France put 4.5 billion euros into a national blockchain development fund.
In other words, there’s a whole lot of money betting on the future—which is basically the same place we were when I first wrote about the bubble almost five months ago — lots of money, little traction.
Can usage grow enough to justify prices? Will implementation keep up with the hype?
Which will grow faster: bitcoin or the bubble?
Kevin O’Leary’s Was Right About Bitcoin
Kevin O’Leary has a point when he says bitcoin is (still) a useless currency.
I’m confident that will change with time, effort, and continued improvements. I see a bright future, but that’s not yet a reality. Let’s not get ahead of ourselves.
One thing’s for sure, though. If I’m right and bitcoin’s still a bubble, that bubble is still growing.
It never burst.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.
About the Author: Mark Helfman is a former U.S. Congressional aide and cryptocurrency commentator. He is a top writer on Medium and Quora for cryptocurrency, finance, and bitcoin topics. His book, Consensusland, explores the social, cultural, and financial challenges of a fictional country that runs on cryptocurrency. Catch him at markhelfman.com.