There is an equal divide right now in every sector of the economy on whether Bitcoin is a bubble. Millionaires and Billionaires are all chiming in. These are some pretty smart people, and they still can’t agree.
So what does the retired MLB player Frank Thomas have to do with Bitcoin and Tulips?
1990 was Frank’s rookie year. In 1991, a company called Upper Deck started to produce a premium baseball card to compete with Topps. Early in 1991 you could buy a Frank Thomas Upper Deck rookie card for $1.00. By 1994, the price had soared to $200, and perfect examples were selling for $400. The problem was, that in 1994, nobody knew how many rookie card were printed, and there was no regional interaction to compare prices. Prices were dictated, in part, by a magazine called Beckett.
Then, in 1995, a company called Ebay emerged, and instead of trading, and selling, the cards at memorabilia events, it could be done online. Within a year, the price collapsed as the true market price was discovered. Today, good examples can be found for $2.00.
Moving on to Dutch Tulips in the 1600’s, it’s almost embarrassing to think that a desperate Billionaire trying to save his bank has to resort to comparing Bitcoin to Tulips. In the 1600’s the Dutch population was about 1.5 Million according to Wikipedia:
We are pretty sure that there was no internet, phone service, or Ebay back then. So, the price was dictated by an elite group that was only a small percentage of that 1.5 Million people. If there was an Ebay, people from other countries would have entered the market, and it would have self regulated just like the market regulated the price of the Frank Thomas rookie card in 1995.
Bitcoin on the other hand is no longer isolated to a small group of tech individuals. The market has become global, and aside from price manipulations at individual exchanges, the demand, and therefore price, is self regulating. Its use as a method of exchange is also becoming integrated into society on a daily basis. Bitcoin ATM’s are popping up everywhere, and new companies are opening up to the option almost as frequent.
Maybe the next time a Billionaire decides to call Bitcoin a bubble, he should consider that he makes more money in 1 day than a Foxconn employee makes in 5 years. So shouldn’t he be more concerned that his wealth is a bubble, and not worry about the Bitcoin he doesn’t own?
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