The Bitcoin Bubble Explained in Layman Terms

Bitcoin is one of those currencies that have been quite the mystery for a lot of people. The stock market brought in some very large values and the interesting thing is that this is quite similar to the dotcom bubble that happened in the 2000s. Basically, each time something new enters the market and a lot of people invest in it, the market explodes.

But at the same time, there’s always a possibility that the prices are getting lower and lower in no time. The Bitcoin popularity is off the rooftop, to the point where a lot of ICOs are offered right now. Most of them are Bitcoin-based, others try to be an alternative to Bitcoin. There’s no denying that everyone wants to be a part of the craze, and the results can be quite amazing if everything is done properly.

What is the Bitcoin appeal?

You can find three strands here. First, you have to note that the total amount is 21 million, so the supply is limited. Then there’s also the fact that the long-term value of fiat currencies may not be as good as you may imagine. Also, Bitcoin is very appealing to people as it offers a simpler way to transact without having third parties involved in something like this.

The supply is smaller since there are more Bitcoins on the market right now. But since the demand is higher and the supply is getting smaller, there’s a reason why that price is continually going up. People don’t want to use Bitcoin on a daily basis. They just want the Bitcoin to exchange it to fiat currencies. While that created a demand for the coin, things didn’t really go the way most people expected, and that’s not a good thing for this coin in the first place.

As you can imagine, as soon as the market started to realize this, the price fell quite a lot. And it’s easy to see why. When the market demand is not extremely high for something and people don’t really use that often, the price is bound to fall.

People got Bitcoin so others could get them at a higher price. While that worked for a few people as a speculation, there’s no denying that at one-point people realized that the price they paid is very high. It’s basically similar to fool’s gold. You have to know what you are investing your money in, and that’s a crucial aspect to focus on.

Will Bitcoin come back to a better price in the future? Well, as per this bitcoin guide, it all depends on the demand. But Bitcoin isn’t ready to become a major currency as long as people aren’t willing to ditch fiat currencies. And that is not going to happen especially when a currency like this is limited in number. The adoption will always be limited, and that’s where the entire problem seems to appear. But there are some ways to tackle this type of problem. It all comes down to using some other cryptocurrencies, but the more coins there are on the market, the lower the value will be!