It’s Official: Bitcoin Surpasses “Tulip Mania”, Is Now The Biggest Bubble In World History

Tyler Durden's picture

One month ago, a chart from Convoy Investments went viral for showing that among all of the world’s most famous asset bubbles, bitcoin was only lagging the infamous 17th century “Tulip Mania.”

One month later, the price of bitcoin has exploded even higher, and so it is time to refresh where in the global bubble race bitcoin now stands, and also whether it has finally surpassed “Tulips.”

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Conveniently, overnight the former Bridgewater analysts Howard Wang and Robert Wu who make up Convoy, released the answer in the form of an updated version of their asset bubble chart. In the new commentary, Wang writes that the Bitcoin prices have again more than doubled since the last update, and “its price has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip’s climb over the same time frame.”

That’s right: as of this moment it is official that bitcoin is now the biggest bubble in history, having surpassed the Tulip Mania of 1634-1637.

And with that we can say that crypto pioneer Mike Novogratz was right once again when he said that “This is going to be the biggest bubble of our lifetimes.” Which, of course, does not stop him from investing hundreds of millions in the space: when conceding that cryptos are the biggest bubble ever, “Novo” also said he expects bitcoin to hit $40,000 and ethereum to triple to $1,500.

Bitcoin could be at $40,000 at the end of 2018. It easily could,” Novogratz said Monday on CNBC’s “Fast Money.” “Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well.”

As for Wang, here are some additional observations:

I continue this topic and discuss a main driver of bubbles. When we see a dramatic rise in asset prices, there is often an internal struggle between the two types of investors within us. The first is the value investor, “is this investment getting too expensive?” The second is the momentum investor, “am I missing out on a trend?” I believe the balance of these two approaches, both within ourselves and across a market, ultimately determines the propensity for bubble-like behavior. When there is a new or rapidly evolving market, our conviction in the value investor can weaken and the momentum investor can take over. Other markets that structurally lack a basis for valuation are even more susceptible to momentum swings because the main indicator of future value is the market’s perception of recent value.

We will publish the balance of Wang’s full note “What causes asset bubbles?” shortly, but for now we just wanted to experience a moment of true zen serenity, knowing that we now stand in proximity to an asset bubble the magnitude of which has never before been observed by humanity. Thanks central banks!

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kokoda - AZEK (Deck Boards) doesn't stand behind its product
kokoda - AZEK (Deck Boards) doesn't stand behind its product

Ooh, all the rich are competing with each other buying BC.

Got to take out a Home Equity loan to buy me some BC. Hurry, hurry, hurry. I don’t want to be left out.

Zarathustra

I can’t get over the fact that you are buying nothing but bits and bytes. I’ll pass.

rhs jr
rhs jr

When this stalls like a fighter jet would, can the Rothschild’s recover it before it digs a hole the size of NYC?

Wip
Wip

Bitchez, you better get yourself some Litecoin, Bitcoin or some kind of coin. You’re gonna wish you listened. Go with what’s hot because anything CAN be used as currency.

I’m not a currency expert but I did stay at a Motel 6 last night.

Rdawg
Rdawg

“…some kind of coin.”

How about Morgan or Peace dollars? Those are coins.

Wip
Wip

I’m not a currency expert but I did stay at a Motel 6 last night.

Rdawg
Rdawg

I’m sensing levity here, but it’s over my head.

Wip
Wip

Bingo!! Haven’t you seen those commercials?

Rdawg
Rdawg

Don’t have teevee, sorry.

Anonymous
Anonymous

Thin market for then and they, along with silver, haven’t done very well for quite a while.

Try to put any large number of them on the market and the price collapses.

Best to look for something else.

Zarathustra

I have some Confederate dollars. I’ll sell them to you at a 50% discount off face value. Its a great deal, man!

nkit
nkit

There is a bigger market for Confederate dollars than you think dummy… not in Iran of course, I admit,..but…

Wip
Wip

Sounds good to me. Get my addy from admin and send them along. I’ll send a check back to ya.

BL
BL

Z- If you tell me what you have and the grade on the notes, I can give you some idea of value. Currency is my forte.

Boo Radley
Boo Radley

Wip,

I think you mean these….

Rdawg
Rdawg

I stayed at a Holiday Inn Express in Shreveport, LA about 10 years ago. It’s the only place I’ve stayed that required you to buzz in through a sally port, and had an armed guard in the lobby.

Wip
Wip

Yes, that’s it. I can’t believe no-one else got it.

Josh Stern

People tell me the service advertised here is actually a trap: http://www.bbc.com/news/world-us-canada-40828608 – so it’s difficult to know the thoughts behind a given commercial.

Iska Waran
Iska Waran
steve
steve

Bubbles are surprisingly symmetrical. The ride to the top (in time and height) is equivalent to the fall on the back side. Look out belowwwww. I think it was Rembrandt who lost his life savings in the Tulip bubble.

steve
steve

Oops, its was Sir Isaac Newton who lost his ass in the South Sea Corp, not Rembrandt in tulips

TPC
TPC

My friends are starting to buy into it. Spamming facebook non-stop with their new found wealth.

Once the common man has gone all in, you know its time to get out. Only a matter of time before someone pulls the rug out from under all of them, with the richest skating away with massive profits, and the average person left holding the bag.

DC Sunsets

This is the Age of Intangibles. Ours is a society of dreamers.

Will the dream become a nightmare? IDK.

BTW, Bitcoin long ago surpassed Tulipmania. Back when I first saw an investment newsletter talk about this “new thing called Bitcoin” it was $0.15 per.

$100 “invested” then would be over $7,000,000 of late. There is no record of an investment mania even an order of magnitude lower than this.

We live in absurd times. Enjoy what we have today, appreciate it….for this is simply not possible to sustain. The world we know today was built on a surge of Social Trust (engendering peace and world trade on an unprecedented scale) and that surge will not last forever. When that tide of Trust goes out, the peace, tranquility and cornucopia of cheap consumer goods will all evaporate.

Stock up on things you know you really like, that are produced via a global system of peaceful cooperation. When this long boom ends, so will their availability.

i forget
i forget

Social trussed.

DC Sunsets

The advent of ways to buy Bitcoin with credit cards, and of derivatives markets for cryptocurrency speculation, strongly suggests we’re nearer the top than to the bottom.

ASIG
ASIG

Two of the strongest emotions are greed and fear. Greed is the driving force on the way up and fear on the way down.

I read the book Extraordinary Popular Delusions and the Madness of Crowds more than 40 years ago so I know how this ends up, it’s just a question of timing. When do I get to say “I told you so”?

Break out the popcorn; this is starting to get good.

Anonymous
Anonymous

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