Bitcoin is going through the roof and there may be a historic event that it mirrors……
Tulip Mania, also called Tulip Craze, Dutch Tulpenwindhandel, a speculative frenzy in 17th-century Holland over the sale of tulip bulbs. Tulips were introduced into Europe from Turkey shortly after 1550, and the delicately formed, vividly coloured flowers became a popular if costly item. The demand for differently coloured varieties of tulips soon exceeded the supply, and prices for individual bulbs of rare types began to rise to unwarranted heights in northern Europe. By about 1610 a single bulb of a new variety was acceptable as dowry for a bride, and a flourishing brewery in France was exchanged for one bulb of the variety Tulipe Brasserie. The craze reached its height in Holland during 1633–37. Before 1633 Holland’s tulip trade had been restricted to professional growers and experts, but the steadily rising prices tempted many ordinary middle-class and poor families to speculate in the tulip market. Homes, estates, and industries were mortgaged so that bulbs could be bought for resale at higher prices. Sales and resales were made many times over without the bulbs ever leaving the ground, and rare varieties of bulbs sold for the equivalent of hundreds of dollars each. The crash came early in 1637, when doubts arose as to whether prices would continue to increase. Almost overnight the price structure for tulips collapsed, sweeping away fortunes and leaving behind financial ruin for many ordinary Dutch families.
Bitcoin started at a low price and just recently went over $1000…..is this possibly a Tulip Craze again?
Over the festive season, the conversation in my household inevitably turned to the phenomenal rise — and fall — in the US dollar price (exchange rate) for Bitcoin during December (Figure 1). The roller-coaster ride of the blockchain-based currency has been front-page news for the mainstream media, where it has been both likened to and disassociated from the boom-and-bust of the infamous 1637 Dutch tulip craze.
Will history repeat itself? Will this situation be a bubble that burst and sends the economy into a tail spin?
It seems the “Oracle of Omaha” (?)…..sees it as a bubble also…..
Billionaire investor Warren Buffett said Wednesday that he would never invest in Bitcoin or other cryptocurrencies, and predicted the wildly popular assets are in for a fall.
“I can say almost with certainty that cryptocurrencies will come to a bad end,” Buffett told CNBC in an interview.
Buffett’s comments were backed by Charlie Munger, his longtime partner at his investment company Berkshire Hathaway, who described the soaring values of Bitcoin and the other cryptocurrencies as “bubbles”. Munger said investors “are excited because things are going up at the moment and it sounds vaguely modern. But I’m not excited.”
If it does find the bottom and people will lose big…… I am sure that it will be Obama’s fault or maybe Clinton’s also….