Bitcoin: Bubble or Anti-Bubble?

The following analysis summarizes my current thinking about Bitcoin and Crypto Currencies. LikeFrida Khalo, “I don´t want you to think like myself. I want you to think”. The analysis is quite comprehensive but certainly not exhaustive and tries to be as objective and unbiased as possible, mindful of my own biases and blind spots. Whether we agree, disagree, or simply “agree that we disagree”, I hope the arguments will help you reach your own conclusions and avoid herd mentality and manipulation in one direction or the other.

Let’s start with some simple definitions:

Bubblesareartificiallyexpensiveassetsdriven by a false belief known as amisconception. They reflect situations where “the emperor has no clothes” and will collapse “a matter of when, not if”.

Anti-bubblesareartificiallycheapassetsdriven by amisconception. They are a mirror image of the bubble that, in addition to offering extremevalue, provide aneffective hedgeagainst the bubble.

As two expressions of the same process, the eventual implosion of the bubble and explosion of the anti-bubble will happen at the same time and are driven by the same catalyst. Like an anti-virus or an anti-missile, anti-bubbles are…