One of the pioneers in the industry of cryptocurrency, Joseph Lubin has recently stated that the market on cryptocurrency is “totally a bubble,” but also that it could be a good thing.
Lubin stated that “this is the good kind of bubble that occurs when a profound technology emerges and can’t build out its infrastructure fast enough for all the people that see the value and the vision.” Lubin is the co-founder of the ethereum digital-transactions platform.
Looking at Bitcoin, the most popular cryptocurrency by market capitalization, the almost seven-fold increase has alerted some to believe that it is a bubble. Investors like Ray Dalio and Peter Thiel have been quoted stating whether or not supply-demand analysis can be given to such a new and unregulated market. Bitcoin has risen very quickly in value which has scared some into thinking that it could be slowing down soon.
Many investors and large banks are beginning to peak their interest into the underlying blockchain technology that powers all cryptocurrency transactions. Pioneers in the industry such as the aforementioned Lubin, have stated that any price corrections in the near future could ultimately help to grow the market rather than hurt it. Lubin stated that “we will see bubble, after bubble, after bubble, each larger than the last and each creating more fundamental value, because this technology is so powerful and profound that it is going to change the way IT systems around the world are being built.”
Bridgewater Associates Inc. founder Ray Dalio recently stated that “it’s very much speculative people thinking, ‘can I sell it at a higher price?’ and so, it’s a bubble.”
The hopes are high that if the market is in fact a bubble, it can slowly recede to a place of sustainability and stability.