Economic Bubbles and their shortcoming: is crypto a bubble?

October 25, 2021 Quick read

Before the advent of cryptocurrencies, we’ve always relied on traditional fiat centralization. However, these two have since then had several issues, from mismanagement to distrust and inflation. These problems have led to various economic bubbles, which have left the financial sector with one problem or the other, even around the world. Since there are causalities in the world, it’s important that we weigh the causes and effects, as several concepts adopted by the central banks need to be revised to combat these economic bubbles. Note that if cryptocurrency is to be the next economic bubble, there are several successful tips on how to overcome and win against cryptos.

In 2019, the total stock market cap in the United States was more than $30 trillion. A few months after this milestone was achieved, more than a million dollars was lost in just 31 days. During this era Apple was notably the biggest company, being the first to be worth a trillion dollars by market cap. At this time, the national debt in the United States has risen to about $21 trillion, with about a trillion dollars deficit the following year. These huge numbers in debt need to be solved. Hence, a lasting solution is required; just then, we had crypto. The crypto community, however, has been one to be moved with regulation.

In contrast, other economies just moved for the total prohibition either for transactional means or as a store of value. Nonetheless, after a few years, they soon realized how effective cryptocurrency could be for the growth of the economy. The growth of bitcoin soon gave birth to the realization of how much of a solution the crypto community is, rather than it being the next bubble.

Undoubtedly, crypto remains one of the fastest-growing commodities in the capital market, with jaw-dropping growth. However, because of this growth, there have been several comparisons between its trend and that of the 2000 dot-com being the biggest bubble of all time. Notably, there are more than one reasons why crypto could be the next biggest economic bubble of all time. However, more than any market, even the gold market, the bitcoin, and the entire crypto community remains promising with new developments daily.

Why are long commodities the most traded recently?


For most active traders on exchange platforms, most have been fond of bitcoin and trading it as a long commodity. The reason behind this is not far-fetched, and that’s because bitcoin is very volatile. Those traders who understand technical analysis and know their onions would understand that the more volatile a commodity is, the more predictable it likely gets. To a layperson, this might sound stupid or somewhat awkward. However, if you want to enjoy the benefits of cryptocurrency as a successful trader, you must be willing to do what others cannot do. Live trading comes with its risks, but several traders have mastered the art of mastering their crafts and being excellent at what they do best- trading.

Recently, bitcoin started skyrocketing, almost setting a new all-time high after the April-September “near bear” run. Currently, bitcoin is trading around the $61,000 mark and still sees a bull run from there, making it the perfect commodity to long. For traders that are into leverage trading (futures), they understand the importance of using a reasonable leverage point and a strategic entry point. These two are some of the most important factors to keep in mind when trading long commodities. A realistic leverage point and a lower entry point will likely give you enormous profit and a reasonable liquidation point.

Most policymakers regard the crypto community as the next bubble because they fear its growth. It has been such that it remains unrealistic. Bitcoin grew about 600% more than its previous years. This is why trading bitcoin and other forms of cryptocurrencies are regarded as an economic bubble. The growth of the overall crypto community is one of the reasons why bitcoin would become the future of money. The price of bitcoin is expected to cap about $100,000 before 2025, making it the largest cryptocurrency of all time. Currently, it’s the number one cryptocurrency in the crypto community with massive user adoption. If bitcoin should continue in its present trend, it’s most likely to make the $125,000 point before 2025 as several investors and financial institutions have taken a likeness in its growth. More than any concept, the crypto community remains the only hope to solve the issue of the economic bubble if it happens again.