The latest Tweetstorm to hit the crypto space sees famed Bitcoin economist and author of The Bitcoin Standard, Saifedean Ammous, insist that the world’s most used cryptocurrency cannot be compared to bubbles and is a “completely new animal” that is designed to rise in value with unprecedented pace.
It all started with a fairly innocent and common question about Bitcoin:
Is Bitcoin a bubble?
How does it compare to history's famous bubbles? And what can we learn from this comparison?— Saifedean.com (@saifedean) March 24, 2019
After several reactions from followers, Ammous then responded with a comparison of the housing bubble in the US grow about 200% since the late 1980s to the early 2000s, before shrinking 40% in the few years after. He followed that up with what he said was the “nocoiner favorite” Dutch tulip bubble of 1634, in which prices rose 60-fold in two years before crashing below the original price. He then posted a chart of the 1929 Great Depression in the US, showing how the stock market grew 500% in ten years before crashing to its original value.
Ammous argued that Bitcoin, on the other hand, has risen 200,000,000% before crashing to about 30,000,000% of its value, then proceeded to say:
“… nothing has ever risen as fast and as much as Bitcoin has risen.”
Bitcoin is not only incomparable to bubbles, its fast rise is also incomparable to the most successful companies and innovators. As far as I can tell, nothing has ever risen as fast and as much as Bitcoin has risen. pic.twitter.com/nywEGMsJHV
— Saifedean.com (@saifedean) March 24, 2019
The author believes that the key differentiation factor for Bitcoin is its built-in difficulty adjustment, that sets it apart from all its comparisons of monetary assets.
However, despite believing in Bitcoin being in a class of its own, Ammous warns that past patterns should not be relied on to repeat themselves and that a continued rise in value was not a guarantee.
“It can fail, or demand could disappear for many reasons. It could crash 90% from here and not recover in 20 years. Betting serious money on something so volatile is stupid and dangerous. If you do it, don’t blame me!”
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