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Is the Bitcoin Bubble Finally Bursting? One Financial Analyst Believes So

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Well, Bitcoin has been through so much in the recent past. Right from the beginning of last year when its gospel spread and prices soared exponentially, there have been talks that sooner or later, the proverbial bubble will surely burst. The coin was able to prove the naysayers wrong for the better of last year, but the beginning of this year has not been too good for its price, as it has gone through some ups and downs.

Bitcoin Price Dip Causing Ripples

Currently, the price is well below the $10,000 mark and there have been financial experts voicing their concerns about the expected burst of the bubble. One of these is Stefan Hofritcher, the Head of Strategy and Global Economics at Allianz Global Investors. He says:

“It appears to us that Bitcoin mania is a textbook-like bubble – and one that is probably just about to burst. The cryptocurrency ‘ticks all of the boxes that we consider to be essential criteria of any asset bubble,’ including a fivefold surge in trading volumes over the last five years, lack of financial regulation and the launch of related financial instruments such as Bitcoin futures.”

Stefan believes that Bitcoin as it is currently structured has notable inherent flaws that will lead to its downfall anytime from now. As such, he reckons that it is no longer a matter of if but when.

No Intrinsic Value?

Hofrichter says that Bitcoin doesn’t have any intrinsic value, considering that it does not claim any company or government assets and is not income-generating in any sense. Other flaws noted by Hofrichter include high price volatility, high transaction fees and its inability to act as a store of value.

Despite his reservations about Bitcoin however, Hofrichter, has given blockchain a clean bill of health, saying he sees potential merits in it. It should be noted that some firms like Accenture and IBM have employees focused on blockchain research.

What do you think about Hofrichter’s comments on the future of Bitcoin? Is the bubble about to burst? Let us know your views in the comments section below.

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