Thread by @saifedean

Is Bitcoin a bubble?
How does it compare to history's famous bubbles? And what can we learn from this comparison?

The famous housing bubble saw housing prices triple in around 20 years, and then lose around 40% over a few years.

Nocoiners' favorite bubble, Dutch tulips, lasted for just over 2 years in which the price appreciated around 60-fold, then crashed lower than its original price.

The 1929 stock market bubble saw a 6-fold increase over a decade, followed by a crash back to around the original price. For more on this, read Rothbard's America's Great Depression.

Meanwhile, Bitcoin appreciated to 200,000,000% of its value in nine years, then crashed back down all the way to around a 30,000,000% rise.

Bitcoin is not only incomparable to bubbles, its fast rise is also incomparable to the most successful companies and innovators. As far as I can tell, nothing has ever risen as fast and as much as Bitcoin has risen.

Bitcoin is a completely new animal, different from all before it. Your old toolbox for analyzing bubbles, currencies, and stocks doesn't work on it.
My explanation for this rise is that bitcoin's difficulty adjustment makes it a truly unique monetary asset built to rise fast.

I discuss Bitcoin's difficulty adjustment and its importance in-depth in my book, The Bitcoin Standard, available worldwide now in 5 languages, soon in 8 languages more, in many good bookstores and wherever books are pirated!
thesaifhouse.wordpress.com/book

This isn't to say Bitcoin is guaranteed to rise. It can fail, or demand could disappear for many reasons. It could crash 90% from here & not recover in 20 years. Betting serious money on something so volatile is stupid & dangerous. If you do it, don't blame me!

Doug French wrote a great account of tulip mania that would make for good reading for nocoiners:

mises.org/library/truth-…