Editors Note: Bitcoin collapsed by 40% just before the release of this article.

Bitcoin. It’s the raging topic at every financial media outlet in the world, the center of every “currency collapse” conversation from London to Tokyo, and I personally can’t open a page of Twitter feed without seeing the word at least four times.

It’s either humankind’s first digital “free-market” currency here to rescue us from the evils of central banking, or it’s shaping up to be the next biggest bubble in human history.

Looking at the price action of Bitcoin, it’s difficult to resist the idea that this isn’t another tremendous bubble. The price of Bitcoins are skyrocketing to nose-bleed levels, and I’m getting flooded with messages on why I should be taking them more seriously—for the simple reason that, “Everybody else is, and if you don’t, you’re going to miss the next biggest thing, etc, etc.”

While I’ve decided to stick with my sovereign paper money for now (which may also go to zero someday), I thought it would be interesting to take a look at the price history of Bitcoin when compared to ten of the biggest bubbles in human history.

But starting out with, let’s take a look at Bitcoin.

Bitcoin Bubble?

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In looking at the price performance above, it should be noted that Bitcoin has already exceeded many of history’s most notorious bubbles. More importantly however, is that the speed in which Bitcoin has exploded higher is nothing the world has ever seen before. 4,000%+ moves have historically taken many months and years to complete. Bitcoin has accomplished this in just eleven months. This might indicate that when tides turn on Bitcoin, they may do so at one of the fastest speeds ever seen in history, meaning that if we see a major collapse in Bitcoin—it could occur within minutes.

With that said, let’s take a look at ten of the biggest bubbles in human history, starting from smallest to largest:

Bubble #1: 1700′s South Sea Company

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The South Sea Company bubble rose a total of 750% before quickly collapsing 92%.

Bubble #2: 1980′s Gold

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The 1980′s gold bubble rose a total of 2,276% before collapsing 64%.

Bubble #3: 2005 Homebuilder Stocks

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The 2005 Homebuilding stock index bubble rose a total of 2,944% before collapsing 88%.

Bubble #4: 1980′s Silver

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The 1980s Silver bubble rose a total of 3,099% before collapsing 88%.

Bubble #5: 1600′s Tulip Bubble

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The 1600′s Tulip Bubble rose a total of 5,900% before quickly collapsing 82%.

Bubble #6: 2000′s Amazon Stock


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The 2000′s Amazon stock bubble rose a total of 7,543% before collapsing 94%.

Bubble #7: Fannie Mae Stock

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The Fannie Mae stock bubble rose a total of 12,696% before collapsing 100%.

Bubble #8: Bre-X Minerals Stock

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The Bre-X Minerals Stock bubble rose a total of 13,305% before collapsing 100%.

Bubble #9: Poseiden Nickel Stock

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The Poseiden Nickel Stock bubble rose a total of 34,900% before collapsing 82%.

Bubble #10: 2000′s eDigital Stock

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The eDigital Stock bubble rose a total of 45,400% before collapsing 95%.

(Editors Note: So far, eDigital appears to most closely resemble the chart of Bitcoin)

Final Thought: The jury’s still out on Bitcoin. It will either move higher to gain worldwide acceptance (and a permanent price plateau), or the established currency powers will step in early and eliminate it. The third and obvious outcome, is that it may simply burn out and collapse under its own weight.

Either way, Bitcoin’s ballooning price is unsustainable, and when it begins to crack—watch out—it may return to its intrinsic value; which is $0.00.

In closing, here is one final chart of Bitcoin, minus the graphics. Is it the next biggest bubble in human history? Only time will tell.

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Tekoa Da Silva
Bull Market Thinking  

Chart sources: Sharelynx.com, Blockchain.info.