Search
 
Commentary

Is the bitcoin bubble about to burst?

We may be staring down the barrel of a massive 'bubble.'

By Nick Graf | Updated on January 12, 2018
While digital currency created new millionaires in 2017, real world applications remain limited. (Photo: iStock)

In December of 2016, the cryptocurrency bitcoin was valued at a little over $600. Today it has reached nearly $18,000. So what’s fueling bitcoin’s increase in value? And with a 1,000-fold increase in bitcoin value over the past five years, are we staring down the barrel of a massive “bubble,” similar to what happened with Tulips in the 1600s, the dot-com implosion, and the 2008 financial crisis?

An investment in bitcoin differs from traditional stocks and bonds because it does not pay revenue to the owner, such as a stock paying dividends. Bitcoin is very similar to gold in this regard. According to an article in Ars Technica: ”Gold’s value defies conventional market analysis in much the same way bitcoin’s value does. Gold doesn’t pay a dividend and only about 60 percent of the world’s gold supply is devoted to jewelry or industrial use.”

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Nick Graf

Recommended Stories

Complex Claims & Litigation Forum 2025Event

This conference aims to help insurers and litigators better manage complex claims and litigation.

Get More Information
 

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.