Crypto is NOT a Bubble. Never was, and hardly ever will be.

Before you read this article, I kindly invite you to read my earlier take titled "The Bubble Economy".

A while ago, every time you read something about cryptocurrencies you would constantly find someone claiming it to be, or quoting somebody who claims it to be the biggest bubble the mankind has ever seen.

Right now, the narrative has shifted, and many of the ill-informed experts are proudly stating that the bubble has burst. The funny (or in this case – sad) thing is that cryptocurrency market never was in a bubble.

Even if it was, it falls way behind some of the biggest bubbles that are currently in place. As perspective is everything, let me walk you through the Biggest Economic Bubbles of Nowadays:

• Cryptocurrency Market. At the point of press, the entire market cap of all cryptos is worth roughly $224 billion, with Bitcoin, Ether and XRP comprising of $114, $24 and $23 billion respectively. As you will later see, this is a tiny drop in the ocean of Economic Bubbles.
• Gold Market. The total value of all the gold in the world is estimated to be from $7.5 to $7.8 trillion. This is about 33 times the size of the entire cryptocurrency market.
• Stock Markets. The world’s bourses have recovered nicely since the Great Recession, posting a combined total value of circa $77.7 trillion. This is more than 330 times the size of the entire crypto market.
• All the Money in the World. It is estimated that all the money in the world is worth roughly $95.7 trillion. Over half of the world’s money exists electronically in deposits at various banks and institutions. It is interesting to note that USD only accounts for 1.7% of all the money in circulation.
• Real Estate. The global real estate market is estimated to be worth around $217 trillion. One must note that the vast majority of value in the global real estate market is in the form of houses and apartments.
• Global Debt. This is one of the biggest and most interesting bubbles. The world’s debt (which consists of everything from national debt, municipal bonds, mortgages and student loans) is approximately equal to $247 trillion. About 10% is US national debt.
• The Derivatives Market. This is the biggest Economic Bubble right now estimated to be $532 trillion. Unregulated derivatives played a fair role in the housing market crash, hence, they should definitely get more media attention than cryptos.

If you are still struggling to comprehend all of this, the illustration (credit: HowMuch.net) below might be helpful. Just some corrections: apart from the ones outlined above, Apple is now worth $1 trillion, Amazon is at $976 billion, and Jeff Bezos has a net worth of circa $164 billion, being the richest man in modern history (so he could potentially buy all the Bitcoin in the world...).

Bringing it all together

Calling something a bubble might feel exciting, but it is often far from the truth, especially when it comes to the world of cryptocurrencies.

Once you take the perspective, everything falls into places. So cryptos are definitely not a bubble. They never were a bubble, and I hardly imagine them becoming one some day.

P.S. You might enjoy my earlier pieces as well:

?? Investors won't see Bitcoin ETFs any time soon. Here's why

?? All you need to know about Bitcoin ETFs now

?? FinTech Predictions for 2018

?? Blockchain Predictions for 2018

?? Bitcoin is NOT a Currency, and Never Will Be

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at one of the leading alternative banking and payments providers in EEA, I'm an active member of FinTech community and a TechFin evangelist.

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