Is there a cryptocurrency bubble building in 2017 and by when will it burst?
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Study the background information carefully.
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Read the background information carefully, before proceeding.
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Undo changesFinancial Bubbles
Financial bubbles are a heaviliy researched subject. Ever since Nobel laureate Vernon Smith demonstrated how oversupply of credit can produce stock exchange bubbles, our understanding has improved rapidly. Current data suspects that about 90% of bubbles can be attributed to this one reason. A second reason is overconfidence in new technologies broad potential, a hype cycle, last experienced during the dot-com bubble Link: https://en.wikipedia.org/wiki/Dot-com_bubble of 2000 to 2001.
Bitcoint, 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.
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The Rise of New Cryptocurrencies
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Since 2016 a new boom has been is emerging steadily, while the "Bitcoin dominance" went down with accelerating spead in favor of a more diverse currency
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.