Are Crypto Currencies A Bubble And Will Bitcoin Crash?

Are Crypto Currencies A Bubble And Will Bitcoin Crash?

The Early Signs of a Bubble, the Bitcoin Crash.

Bitcoin has been called a bubble by most of the world’s mainstream media and speculators think a Bitcoin Crash is imminent. Billionaire investor Mark Cuban even took to Twitter to express his belief that Bitcoin is a bubble and that there will be a Bitcoin Crash soon. One of the first arguments that people have is that Bitcoin doesn’t represent an underlying asset, which could be liquid. In essence, Bitcoin has a value because everybody decided there’s a value. If all Bitcoin in the world were owned by one person, the person wouldn’t be richer than anybody else. The value of Bitcoin lies in the fact that people believe in the currency as a tender. In this article, we’re going to discuss whether Bitcoin is a bubble and that a Bitcoin crash is coming.

The Terrific “Gain” on Investments

This is an early sign of a bubble as most economists put it. In all, this means that people advertise Bitcoin as a means of making terrific gains on investments. This rise in price of an asset indirectly attracts more investors. Now, these gains can be temporary as well, you could see the price shift by $100 in one day and then fall back to the same level. Mark Cuban called Bitcoin a bubble by implying that when people talk about how they make terrific gains, it’s a bubble.

Volatility

Another clue to Bitcoin being a bubble is the volatility of the asset represented. In this case, Bitcoin has extreme volatility. This past weekend the price rose by over $400. It’s sometimes excessive and one can see how volatile the currency gets. People say that this is another clue pointing to a Bitcoin Crash, claiming that the volatility can be a sign of an impending bubble burst.

So, how can you benefit from a Bitcoin Crash?

Imagine this, every time you discuss Bitcoin with someone, they always make it a point to ask one question; “is it the right time to invest?”. In this situation, most Bitcoin enthusiasts would say it’s never too late to buy Bitcoin. That’s one of the primary reasons why people get paranoid about investing into Bitcoin.

You can benefit from a Bitcoin Crash by investing into a CFD. A CFD – contract for difference – is a way to represent an underlying asset without ownership of the underlying asset. If you buy a CFD, you represent a thought that the asset price will rise, if it does rise, you make a proportional profit. If it doesn’t rise but falls, you will make a proportional loss. This can also work the other way around – and this is how you make money – you can short CFDs. Shorting is called selling an asset and buying it back later on. If you sell it for a high price and rebuy for less, you will make a very high profit. This can be beneficial for people who think that the Bitcoin crash will happen soon.

You can invest in CFDs on Plus500. In our opinion, it’s one of the best Bitcoin trading platforms available today. It provides demo account and also gives a bonus of $25 when someone opens an account and deposits money. You can use the demo account to learn Bitcoin trading well and then continue to complete your deposit.

Read our full review on how to invest into Bitcoin CFDs on Plus500.

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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