Is Bitcoin a bubble?

Recently, there has been a lot of talk about whether or not Bitcoin is a bubble or if it is currently in a bubble. One of the biggest proponents of this idea is Peter Schiff, who compares the rise in price of Bitcoin to the Dutch tulip mania that happened 400 years ago. In a recent tweet, he even suggested that Bitcoin could go down in history as an even bigger bubble. He also recently commented on the possibility of a double top forming in Bitcoin, as the price is currently close to the all-time highs of approximately $20,000.

However, it's worth noting that Peter Schiff has been saying that Bitcoin is in a bubble for the past 11 years. In December 2013, he appeared on CNBC and compared Bitcoin to tulips, calling it a bubble when the price was around $375 per Bitcoin. He has maintained this belief ever since. While it's true that Bitcoin has fallen 30-40% in value at times, it has also gone up 500% after those drops. This lack of consistency in his argument calls into question his honesty on the matter.

So, what can we learn from other cases of "bubbles" in the past? One example is Amazon, which IPO'd at a split-adjusted price of approximately $2.50 and reached a peak of around $110 before collapsing in the bear market of 2000-2002. At the time, many people declared the bubble over and predicted Amazon's bankruptcy. However, a few years later, the company was back up to those previous highs. This raises the question: what happened to this supposed bubble? Why did it fail to burst?

A similar pattern can be seen in the California housing market. The housing bubble of 2002-2008 collapsed in 2010, but since then, the market has recovered to new all-time highs in both San Francisco and Los Angeles. Similarly, Bitcoin experienced a boom from 2013-2017, with the price going from around $20 per share to almost $1,200 before crashing by the end of 2015. Since then, it has also recovered to previous highs.

In conclusion, it's important to remember that bubbles can often take longer to burst than people expect. When something goes up a lot, crashes, and then comes back to those previous highs, it may be time to revise your thesis. While it's true that Bitcoin is still highly volatile and could potentially crash again, it's also possible that it could continue to rise in value. Ultimately, only time will tell whether or not Bitcoin is truly a bubble.