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After more than 10 years of existence, Bitcoin has become the coin that attracts the most attention today. Around it, mixed reviews are stronger than ever.
The historic level for 1 BTC crossed $52,000 on Feb. 17. Bitcoin's incredible growth rate - around 1,000% since the beginning of 2019 - is accompanied by both excitement and doubt.
Unfriendly people speculate on the timing of the currency's collapse. The other side focuses on the long-term development of Bitcoin.
Michael Hartnett, Chief Investment Strategist at Bank of America, said that this is the "mother of all bubbles", to compare this currency to the "dot-com bubble" of the past.
When the fever passes
The "dot-com bubble" appeared in the late 1990s, when the value of shares of Internet companies increased rapidly.
At that time, many browsers were born to help the Internet become more popular. The wave of new technology companies that were born and listed on the NASDAQ brought a fever to the world economy.
Many companies receive large amounts of capital while not yet making a profit. Worried about slowing down, small groups of investors, even those who have never participated in the market, also rushed into the fever, blowing up the growing financial bubble.
Stocks of technology companies quickly rallied, pushing the market value up exponentially. The NASDAQ index rose from less than 1,000 to more than 5,000 between 1995-2000.
The dot-com bubble burst when the financial magazine Barron exposed the inefficient use of capital by companies, most of which were only at a loss and were not profitable.
Panic is gradually spreading among investors. They quickly shifted capital to other channels, leading to a sell-off and a drop in stock prices.
New "Gold"?
Looking back, economists see Bitcoin as a bubble destined to burst.
However, the current market has changed a lot compared to the beginning of the 21st century. Experts believe that Bitcoin will continue to exist even if the cryptocurrency bubble burst.
The burst of the dot-com bubble brought a lot of economic damage, but it also "produced" Amazon, Google and Ebay. In September 2001, Amazon traded for less than $6 per share. 17 years later, Jeff Bezos' company is on the stock market with a valuation of more than $1 trillion.
New investors value this coin because it has many practical applications. This is also what makes experts believe in its future despite price fluctuations.
Bitcoin is independent, does not belong to any particular government or country. The new currency allows people around the world to freely transact, make cross-border payments with cheap and secure fees.
Is Bitcoin worth the most investment right now?
$52,000 is certainly not the last record Bitcoin can achieve. Cryptocurrency experts expect the momentum to continue as more and more practical applications are created around the coin.
Only time can answer the question “Is Bitcoin a bubble”. But now, even governments are focusing on managing this currency. “As regulators pay more attention to cryptocurrencies, the digital asset ecosystem will gradually take shape and be used in a more transparent and active way,” said Shivam Thakral, CEO of Buy Ucoin. .
Others see Bitcoin as the new gold. "Bitcoin will replace gold - an asset worth about 8 trillion USD today," confirmed Lou Kerner, an analyst from Crypto Oracle.
Kerner is not the only one to be optimistic. Veteran Wall Street investors, including JP Morgan CEO Jamie Dimon, said they regretted it just three months after calling Bitcoin a scam.
However, it would still be a mistake not to acknowledge and learn from what happened in the dot-com era.
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