Before taking a deeper dive into how Bitcoin performed, let’s take a look at the classic chart of how a bubble usually goes:
Here is the chart of the 1720 South Sea Company bubble, one of the biggest bubbles in human history:
and here is the well-known Tulip Mania bubble. Observe how similar the stages they went through:
The following chart is what we are more familiar, the 2000-2001 dot com bubble:
And finally, let’s take a look at the comparison between Bitcoin and South Seas Stock.
We are not certain whether Bitcoin is at its peak yet. However, looking at the smilarities between Bitcoin historical price and the classic bubbles, there is something we need to ponder upon before taking serious actions. One thing is clear, investing in Bitcoin at this stage is risky, even though the potential return is attractive. – As the saying goes: high risk, high return. Just be cautious when playing with fire.