As posted in an fresh article posted on Coin Desk, Bank of America Merril Lynch (BAML) researchers have carried out research about cryptocurrency specifically bitcoin. Their report states that bitcoin will go down as the greatest asset price bubbles in history.
In a press release posted on Sunday, Michael Harnett, the lead chief investment strategist, clearly subdivided the current market and showed that it has experienced a 60% correction to date since 2017. He also went ahead to state that the bitcoin bubble is already popping and the market trends in major exchange platforms provides enough proof of this.
In a bid to further proof the point, the bank went ahead to publish a comprehensive chart with details of the various financial manias to hit the financial world such as the South Sea Company that operated in the 18th century as well as Mississippi Company that affect gold prices in the U.S stock market back in 1929. Another similar bubble that was discussed in the report is the 1637 Dutch tulip bubble.
According to the statistics in the chart above, bitcoin so far has recorded the greatest asset price appreciation in the history and by a significant margin that nobody can ignore. At its highest point, the price was more than 60 times what it was just 3 years before. As the research found out during the study, Dutch tulip prices multiplied by only 40 times and that is not anywhere near the bitcoin prices.
The Bitcoin Price Index shows that on December 2017, the price of one bitcoin was $19,783 but currently, it is trading at a low of $6,835. BAML report also goes an extra mile to show what happened after the historic price bubbles such as the Dutch tulip. One of the major points to note is that after the bubble and the prices drop, they tend to remain at the new low levels!
This statistic has however not yet been experienced with bitcoin and this is enough proof that the bitcoin bubble is not the greatest of all time. Concisely, the price of bitcoin increased upwards between 2010-2011 by a 120 fold to reach $11 before crashing and then starting to rise again in 2013-2014.
Finally, the comparison carried out based on the 2017 prices of bitcoin in the market did not reflect the true picture in the market. This is based on the fact that more capital was invested in the crypto market than in 2010, 2011, 2013 and 2014.