Is the Bitcoin bubble a reflection of global macro froth?

Leo Zhang

By Leo Zhang

News & Commentary

In order to understand a market, we have to understand all markets that have an influence on it. The commentary thread below reminds us of asset overvaluation across the board.

Commentary on current amount of bubble in global macro

Some perspectives:

Lessons on bubbles from Bitcoin
(Bloomberg, by Noah Smith)

"This suggests that there’s a good and easy way for regulators to reduce the incidence of bubbles. Whenever a new asset is created or a bunch of new investors enters the market, allow more futures trading and other exchanges that let pessimists publicly register their pessimistic beliefs. That won’t totally prevent all bubbles -- the late 1990s technology stock bubble, for instance, happened in spite of the existence of stock futures markets."

Commentary on custody issues of cryptocurrency trading

The many faces of Bitcoin
(Murad Mahmudov and Adam Taché)

"In particular, the First Theory — Bitcoin being like a digital gold — and the Third Theory — Bitcoin leading to Nash’s Ideal Money — run pretty much in parallel to one another, with the key difference being that the latter states that fiat currencies survive and adjust, while the former states that hyperbitcoinization will disrupt fiat currencies entirely, with everyone eventually demanding payment for their goods, services, and labor in bitcoin."

Technical & Updates

Peter Todd comments on Proof-of-Time, Chia protocol's consensus algorithm

How complex bitcoin politics led to the creation of Decred
(BTCManager, by Alexander Lielacher)

"The currency is guided by four main principles. These include multi-stakeholder inclusivity, free speech, and consideration, incremental privacy and security as well as free and open-source software. These principles are supposed to ensure that Decred can meet the needs of its users, foster communication and participation while maintaining decentralization and autonomy. Decred developers believe this is what bitcoin was meant to be."