4 Major Reasons Why Bitcoin is a Bubble Waiting to Burst

19-4 Major Reasons Why Bitcoin Is a Bubble Waiting To Burst

While the popularity of Bitcoin and other cryptocurrencies has skyrocketed, there are still lots of unanswered questions about them. That’s why the cryptocurrency world is still shrouded in skepticism and fraud. While the idea of cryptocurrencies is a great concept, these reasons make people view it as a bubble that will burst in the future:

Bitcoin fraud is rampant

Bitcoin and other cryptocurrencies are unregulated, which means there is no body to monitor the transactions happening on the network. The transactions on Bitcoin are encrypted, which means a lot of people are using the platform to do dirty businesses and scam people. Banks, on the other hand, are highly regulated and monitored, which means cases of fraud and illegal businesses are few. People fear to invest a lot of their money in Bitcoin because the level of fraud and illegal businesses happening on the network could make the bubble burst.

Bitcoin price is not regulated

Some months ago, Bitcoin value hit $4,000, and this prompted Chinese authorities to declare that they would close down a few Bitcoin offerings. However, news from traditional media and pundits keep saying that the price of Bitcoin will reach $20,000.  But any financial specialist can tell you that when the price goes ridiculously high, the bubble could well burst.

It’s very difficult to determine Bitcoin value

There are specific metrics used to value something. For instance, you can value stocks by simply looking at past and projected earnings, dividends, and sales. Currencies are valued in relation to other currencies. With bonds, the value is determined by the ability of the bond issuers to repay investors. When it comes to Bitcoin and other cryptocurrencies, it’s pretty hard to determine their value because there are no public records of past and future earnings, plus it’s not regulated. That makes it a shaky investment option.

Lack of agreement by governments and financial institutions to take Bitcoin a notch higher

People want a universal currency that will solve the international money transfer dilemma. And they are banking on Bitcoin to make it a reality. But for this to happen, all governments across the world must come together and formulate rules on how Bitcoin will be valued and traded. Most governments are not ready to agree on that, which makes Bitcoin shaky.


The cryptocurrency dilemma will go on for a long time. But, one thing is for sure, people will continue buying them. As long as people are willing to buy them, they’ll be here for the long term.