Mainstream financial analysts are not yet done with the Bitcoin is a bubble narrative to label the cryptocurrencies as a fad. Over the years, BTC skeptics have shown disdain for Bitcoins ability to power financial services and replace traditional currencies effectively. Even though a complete crypto takeover of the financial industry wont happen any time soon, cryptocurrencies have indeed shifted the goalposts.
In the latest research, Man Group, a globally renowned hedge fund, referred to Bitcoin as the Prometheus of Greek mythology. The report says that a new Bitcoin bubble replaces the prior one every time a bubble bursts. This phenomenon is different from what is classically classified as a bubble asset. Unlike financial tragedies of the past, Bitcoin is behaving differently on a fundamental level.
Massive volatility indicates financial prowess of BTC
The Man Group analysis notes that the high volatility of Bitcoin can be attributed to the price-discovery phase. Here, the asset goes under massive volatile movement as part of its financial stabilization and acceptance phase.
Whether or not Bitcoin is a bubble seems more complicated after the Man Groups analysis. Many skeptics have written off BTC over the years after claiming it to be just another financial bubble featuring an inflated asset. Admittedly, the same can seem right if one considers the massive price movements, volatility, volume mismatches, FOMO, and real-world implications. Historically, the price does seem inflated at times.
However, seve ...
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