(This post originally appeared on CCN.com.)
Earlier this month, bitcoin’s price zoomed past $8,000 and left everybody buzzing about a new bull market.
Crypto twitter took the news as opportunity to mock the masses who thought bitcoin was a bubble. Here are two tweets that reflect the general sentiment.
From @danhedl:
From @BlocktownCap:
As Wade Barrett would say, I’ve got some bad news:
Bitcoin is still a bubble.
Motion is not progress
For all the great things happening with cryptocurrency, it hasn’t taken off.
Bakkt, a planned cryptocurrency mega-exchange from the company that runs the New York Stock Exchange, still does not have U.S. regulatory approval and doesn’t know when, or if, approval will ever come, despite announcing a new launch date of July 2019.
For all its 6 million users, Brave browser doesn’t even crack the top 10 most-used browsers (and only a handful of advertisers use its cryptocurrency). Most of Ripple’s “clients” say they’re just testing the technology. Steemit remains in beta after three years and Ethereum delayed a network upgrade until mid-2020.
IBM hasn’t exactly set the world on fire with its blockchain solutions. Factom is still a tiny Texas company. Many smaller cryptocurrencies continue to fall behind on their roadmaps. And when the heck will Cardano finish ADA?
You still can’t buy coffee with bitcoin without taking a massive tax hit, and New York just dropped a bombshell about cryptocurrency exchange Bitfinex, accusing the company of $850 million in fraud. Almost all bitcoin trading volume is fake and this most recent pump may have come from fraud and manipulation.
Which comes first: actual adoption or the bubble pop?
If that’s too gloomy, I apologize. Clearly, bitcoin has gotten its mojo back and overall there’s lots of good news for cryptocurrency fans.
Lightning Network capacity is surging, and the number of bitcoin wallet users continues to rise:
VCs invested over $3 billion in blockchain projects in 2018 and 2019 ($334 million in the first quarter of 2019 and $2.85 billion in 2018).
On top of that, you have traditional investors and financial institutions entering the cryptocurrency markets. Yale, MIT, University of Michigan, Virginia’s Fairfax County pension fund, one of the Rockefeller family offices, and several others have already publicly acknowledged they’ve bought a little cryptocurrency.
We also see traditional businesses enter cryptocurrency. Rakuten announced plans to open an exchange in Japan. Samsung, Facebook, and Telegram floated plans to create their own cryptocurrencies (JP Morgan created one earlier this year and IBM has used XLM for a while).
Square reported a 200 percent increase in bitcoin transactions over the past year while South Korean crypto investors increased their holdings by 64 percent. France put 4.5 billion euro into a national blockchain development fund.
In other words, there’s a whole lot of money betting on the future—which is basically the same place we were when I first wrote about the bubble almost five months ago. Lots of money, little traction.
Can usage grow enough to justify prices? Will implementation keep up with the hype?
Which will grow faster: bitcoin or the bubble?
Kevin O’Leary was right about bitcoin
Kevin O’Leary has a point when he says bitcoin is (still) a useless currency.
I’m certain that will change with time, effort, and continued improvements. I see a bright future, but that’s not yet reality. Let’s not get ahead of ourselves.
One thing’s for sure, though. If I’m right and bitcoin’s still a bubble, that bubble is still growing.
It never burst.
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Mark Helfman is a cryptocurrency commentator and author of Consensusland, a book about a country that runs on cryptocurrency.