Is there a cryptocurrency bubble building in 2017 and by when will it burst?

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§ Judgement rule

How will the final result of the question be determined?

Modify Final result
Early 2017 saw a huge rise in the total market capitalisation of several cryprocurrencies. New highs following one after the other. A decrease of 30% of total market cap from any all time high reached during 2017 shall be defined as a bubble. The day on which the threshold is reached defines the quarter in which the bubble burst. Measure is the total market capitalization, as defined on https://coinmarketcap.com/charts
Reference date: Dec. 31, 2017, 24:00 CET

Answer options

Widget Price
● By 30 June 2017 (before Summer)
19.91 %
● By 31 August (during Summer)
10.42 %
● By 31 October (early Autumn)
9.53 %
● by 31 December (Winter)
19.78 %
● Later or never (it's not a bubble)
40.33 %

Price trend

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Wiki article

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Final result: The Crypto Bubble Burst Quickly

After an all-time high of crypto market cap on 24 May 13:02 UTC of $91,29, the theshold of a -30% decline rose to $63.9 billion. The threshold was broken on 27 May 06:07 UTC by falling to $63.52 billion.

 

Cryptocurrency All Time High May 2017 - Copyright: Screenshot coinmarketcap.com Cryptocurrency -30% Decline May 2017 $63.5bn - Copyright: Screenshot coinmarketcap.com

How the Story Started:
CThe Crypto Currency ryptocurrency Market Capitalisation Shooting Up

In the last month, we saw an enormous rise in the market capitalisation of cryptocurrencies - which is the calculatory book value of crypto units x current price. The rise was particularly pronounced for Ethereum (ETH), Ripple, and Bitcoin. Is this value for "real"?

Financial Bubbles

Internet Bubble / NASDAQ Composite Index - Copyright: Lalala666 on WikipediaFinancial bubbles are a heaviliy researched subject. Ever since Nobel laureate Vernon Smith demonstrated in a replicable laboratory experiment how oversupply of credit will reliably produce stock exchange bubbles, our understanding has improved rapidly.

Current estimates that about 90% of bubbles can be attributed to this one reason, rooted in flawed government policy, failed centralist monetary, credit or tax policy measures, last observed in the Financial Crisis of 2007. A second reason is overconfidence in a high-potential, but hard-to-understand new technology, at the peak of its initial hype cycle, as during the Dot-com Bubble of 2000 of 2000 to 2001.

Bitcoin, the First Cryptocurrency

Cryptocurrency are a digital asset class created (in most cases) by a decentralized blockchain. Invented by the pseudonomous Satoshi Nakamoto, the first Blockchain, Bitcoin, reached an early peak late 2013, when it rose from a market capitization of 2bn USD to 15bn USD in less than 3 months. Followed by a rapid crash to 10bn (2/3) and a slow decline the following 2 years.

Bitcoins First Bubble - Copyright: coinmarketcap.com

 

 

 

 

 

 

 

 

The Rise of New Cryptocurrencies

Since 2016 a new boom has been emerging steadily, while the "Bitcoin dominance" went down with accelerating spead in favor of a more diverse currency universe. 

 

bitcoin dominance - Copyright: coinmarketcap.com

While one could argue this diversification leads to more stability, the application of cryptocurrency is still an open question. Are they more than a speculative asset? Or will the current boom eventually burst because there is simply no buyer left?

Subsequent Expectations

Even if a major downward correction of the broader cryptocurrency market capitalisation were to take place, if may well be that subsequently one (or more) successful cryptocurrencies re-emerge.

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