Is the Bitcoin bubble about to pop?
The news that Google will ban crypto-currency ads has caused the Bitcoin market to slump yet again. Is this really the beginning of the end?
Google has confirmed that it will ban all crypto-currency and initial coin offering ads from June. The announcement, made yesterday, caused Bitcoin’s price to drop 9 %. When Facebook announced it would ban ads on “binary options, initial coin offerings and cryptocurrency” in late January, Bitcoin fell by 12 %.
This crypto-currency, that rose dramatically in 2017 from $1,000 to almost $20,000, has now slumped to close to $8,000 and the crypto markets remain pensive as many financial commentators say the slide is far from finished.
One contributing factor to the recent downturn has been the fears, over the last few weeks, of an another round of major Chinese crypto-currency crackdowns. These fears are exacerbated today ahead of tonight’s annual Chinese State-TV Consumer Day TV show, known as “315” in reference to global consumer rights day on March 15.
The show, a diverse mix of investigative reports and big-stage song-and-dance routines, last year turned the spotlight on Nike Inc for misleading advertising. This year, it has been rumoured the focus will be on crypto-currencies and Bitcoin mining.
In the last few days there have also been a host of calls from the IMF, G20, EU, Japan and USA for global regulation measures after accusations of frauds, scams and pump-and-dump market manipulations, as well as a spate of high-profile, big-number hacks on crypto exchanges.
Bitcoin was first “minted” in 2009 and remained, for many years, for the mainstream financial community at least, a low-value and lowly regarded digital token that was associated with “dark web” criminality and money laundering.
Since 2017 Bitcoin, along with the other 1000+ crypto-currencies that have appeared in its wake, has changed in a number of ways. The most obvious change is that it now attracts trillions from global investors and now also almost continually experiences rapid and steep price fluctuations and it is these two facts that cause numeours mainstream economists and institutions to argue that this space is nothing but another classic “new era” asset bubble that, like all other bubbles, will soon crash to zero.
It is, goes the argument, just like the Dutch Tulip Bubble in the 1630s, the South Sea Bubble in the 1720s, the Japanese Stock Market Bubble in the 1980s and the Dot-Com Bubble in the 1990s.
When considering yesterday’s news about the crypto-currency ad ban, it is interesting to note that the Dot-Com Bubble actually helped Google’s growth enormously.
As yet it remains unclear who will be the long-term winners from Bitcoin .