The prices of all top cryptocurrencies have recovered over the past twenty-four hours and many are back to near record levels. This comes just shortly after Chinese regulators announced a ban on ICOs which caused a panic selloff in the market.
Bitcoin, which fell from a record $5000 to as low as $4000, is now back above $4500 – giving it a $75 billion market cap. Ethereum, which was below $300, is now back at the $330 level with a $30 billion market cap. Likewise, Bitcoin Cash recovered about 16% in the last twenty-four hours, reaching a price of $610 and a $10 billion market cap.
But is this testament to the future of the technology or just a bubble waiting to burst? According to Nobel prize-winning professor Robert Shiller, who wrote the book on bubbles (“Irrational Exuberance”), it might just be the biggest bubble in the world right now.
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When asked by Quartz in a recent interview what the best current examples of irrational exuberance or speculative bubbles are, Shiller answered: “The best example right now is bitcoin.”
Trying to explain the causes, Shiller said: “If you look at the third edition of Irrational Exuberance, I’m arguing that there’s a fundamental deep angst of our digitization and computers, that people wonder what their place is in this new world. What’s it going to be like in 10, 20, or 30 years, and will I have a job? Will I have anything?
Somehow bitcoin fits into that and it gives a sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst.
So I’m trying to deconstruct the bitcoin story. Big things happen if someone invents the right story and promulgates it.”