A few days ago, I heard the news that the value of 1 bitcoin is same as an ounce of gold. I thought it’s interesting. Why?
In the 17th Century, people LOVED tulips. They were very popular. The price of tulip bulb was rising so many people noticed it’s a good idea to become wealthy. Speculative bubble that was created mostly in 1636-1637 let some people earn a lot of money, but a lot of people lost everything because of it. Why did that happen? Because the bulbs were so expensive that nobody was interested in buying it only to plant them in his garden. They cost too much.
Why do I write about tulips in an article about Bitcoins? In my opinion, the news that Bitcoins are becoming more and more expensive causes that less and fewer people may be able to buy it. So if there will be no buyers, then sellers will not be able to sell Bitcoins, and they will have to decrease the prices to get their money back.
I think it may be a problem with this virtual currency. People get money by buying and selling it, but one day they may lose everything like people in 17th Century. Imagine that in one day Bitcoin fails 75% of his value. Everyone who keeps a lot of money in the markets may lose 75% of their saving so even everything. Lots of markets may be closed after declines. In one word: chaos in virtual currency words.