CNBC ran a segment Wednesday claiming that bitcoin is a bubble. The segment began showing Jim Cramer, the host of CNBC's "Mad Money," calling Bitcoin "monopolistic money" and stating that investing in this game is "pure gambling." Cramer said the players would be better in Las Vegas than investing in Bitcoin.
The place of Bitcoin in the bubble of history
After watching excerpts from financial experts denigrating bitcoin, the CNBC compared bitcoin to the 1600s tulip bubble, the Mississippi bubble, the South Sea bubble, the tech bubble, the financial crisis, the big depressions S & P 500 today. The graph compared multiple starting prices for each of these bubbles, then noted that the bitcoin multiple approaches that of the biggest bubble in history, the tulip bubble.
The segment cited the following signs of a bubble that Bitcoin shows: quick movements, plenty of speculation without much understanding of risks, and many non-traditional investors jumping in.
The narrator compared the bitcoin futures initiated by Cboe, the CME group and the Nasdaq to a move by the Dutch before the tulip bubble crash.
See also: CNBC Cramer Mad Money, member of the "bubble" brigade
H Unexplainable highs & # 39;
"For every asset bubble, it's the same story; otherwise, people with reasonable heads drive the prices of a certain asset to inexplicable heights, whether it's the price beanie babies, stocks, houses or maybe cryptocurrency, "said the narrator
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Bitcoin, since its inception, has grown nearly 50 times, the segment noted. If he maintains this growth rate, he will overshadow the US economy in a few years. When other assets generate returns, the bitcoin has no intrinsic value and generates no income in addition to anticipating further price increases, the narrator said.
"It's precious because people think it's valuable."
"Bitcoin has become parabolic, which does not usually end well," said an expert named Cashin. The price of Bitcoin went "parabolic", and such bubbles do not last, the segment has concluded.
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