It's Official: Bitcoin Surpasses "Tulip Mania", Is Now The Biggest Bubble In World History

One month ago, a chart from Convoy Investments went viral for showing that among all of the world's most famous asset bubbles, bitcoin was only lagging the infamous 17th century "Tulip Mania."

One month later, the price of bitcoin has exploded even higher, and so it is time to refresh where in the global bubble race bitcoin now stands, and also whether it has finally surpassed "Tulips."

Conveniently, overnight the former Bridgewater analysts Howard Wang and Robert Wu who make up Convoy, released the answer in the form of an updated version of their asset bubble chart. In the new commentary, Wang writes that the Bitcoin prices have again more than doubled since the last update, and "its price has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip’s climb over the same time frame."

That's right: as of this moment it is official that bitcoin is now the biggest bubble in history, having surpassed the Tulip Mania of 1634-1637.

And with that we can say that crypto pioneer Mike Novogratz was right once again when he said that "This is going to be the biggest bubble of our lifetimes." Which, of course, does not stop him from investing hundreds of millions in the space: when conceding that cryptos are the biggest bubble ever, "Novo" also said he expects bitcoin to hit $40,000 and ethereum to triple to $1,500.

"Bitcoin could be at $40,000 at the end of 2018. It easily could," Novogratz said Monday on CNBC's "Fast Money." "Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well."

As for Wang, here are some additional observations:

I continue this topic and discuss a main driver of bubbles. When we see a dramatic rise in asset prices, there is often an internal struggle between the two types of investors within us. The first is the value investor, “is this investment getting too expensive?” The second is the momentum investor, “am I missing out on a trend?” I believe the balance of these two approaches, both within ourselves and across a market, ultimately determines the propensity for bubble-like behavior. When there is a new or rapidly evolving market, our conviction in the value investor can weaken and the momentum investor can take over. Other markets that structurally lack a basis for valuation are even more susceptible to momentum swings because the main indicator of future value is the market’s perception of recent value.

We will publish the balance of Wang's full note "What causes asset bubbles?" shortly, but for now we just wanted to experience a moment of true zen serenity, knowing that we now stand in proximity to an asset bubble the magnitude of which has never before been observed by humanity. Thanks central banks!


Escrava Isaura Bulgars Wed, 12/13/2017 - 03:33 Permalink

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Av8or: The problem that I see……. you can't just buy and become rich….. That should tell you something. Correct. It tells that it’s time to move Bitcoin out of the free-market, because free-market is a fraud as is but, Bitcoin is abusing of that privilege.  

In reply to by Bulgars

jay35 svayambhu108 Tue, 12/12/2017 - 10:06 Permalink

Given the massive difference in technology and communication between the Tulip era and today, this bubble would have had to have inflated several times more quickly than the Tulip Mania to be a comparable bubble. That it took the same length of time as tulips despite the world interconnectivity we have today, makes this a relatively slow bubble accumulation with a ways to go before it peaks.Today we're seeing ETH and LTC catching up a bit to where they should be in relation to BTC, lagging for weeks while BTC ramped, and now they're finally rebounding somewhat. Even if BTC only reaches 20k and stays there, ETH and LTC have a ways to rise to reach their appropriate fractions of BTC's current dollar value. Novogratz says only 3x (~1500) for ETH if BTC goes to $40k, which seems rather low for something with comparably more utility than BTC. Is ETH's platform and potential really only 1/26th as "valuable" as Bitcoin?

In reply to by svayambhu108

TheRideNeverEnds RationalExuberance Wed, 12/13/2017 - 02:49 Permalink

ZH has been wrong on every market call since it’s inception. About time someone started reporting on it.

This place is the best contrary indicator ever.

When the front page has five articles about “BTC is a bargain at 6,000,0000 buy it now!!!1” maybe I’ll worry but we still have a few thousand more percent till the Tyler’s realize BTC is the future.

I’m guessing in two or three more years when BTC is deep into the seven figures we will start seeing such articles.

In reply to by RationalExuberance

zebra77a TheRideNeverEnds Wed, 12/13/2017 - 04:00 Permalink

Anyone who takes the time to study the blockchain ledger system of hash pointers will see its ability to resist attack, anonymize wealth, avoid socialist taxation, destroy inflationary manipulation,  and afford it to the little guy..  Exchanges which confiscate and or over tax bitcoin  created a market force for direct p2p transfers from  a phone app.. and further offshore exchanges..  It negates the need for the central bank as a decider of what is your investment worth? Someone in Basel Switzerland can no longer decide to secretly devalue your lifetime savings by 15% this year of their own self-interest.. unless you want to term that as succesful investing..No its not as convenient as tap-to-pay, and can take 10 minutes for a transaction to reach aceptance, but watery runny fiat can be borrowed into existence for that  little stuff..Bitcoin has a very specific and useful market function and $300 billion in market cap clearly liked it.  The best software developers in the planet now can become super wealthy to further it creating decentralized exchanges, p2p, rapid transaction forks and so on.. Key to watch for are :    Geometric increase in reporting acclimitizing public and driving further interest.   P2P Bitcoin altcoin software negating   a need for a wallet.   Governments moving in tandem and unified efforts to stop it (aka Europe adopts a Eurocoin they can control..)  Competecoins  Potential Market crashes as concensus decides bitcoin markets and so forth  

In reply to by TheRideNeverEnds

Wayseer a Smudge by an… Tue, 12/12/2017 - 23:39 Permalink

Why do so many dimwits feel compelled to link to music videos? Are you still in high school? Do you want to make me a mixed tape and talk about your feelings?While you are puzzling this out (difficult to type with so much drool on your keyboard I imagine), can you tell me how many computers there were during the tulip mania? oh, and the few computers that existed during tulip mania were all contected to the internet, right?Because tulips and bitcoin/crypto are basically the same thing don't ya know. Seems most think tulips and crypto are the same thing here on zh (man this place has gone down hill a LOT)

In reply to by a Smudge by an…

Golden Showers Wayseer Wed, 12/13/2017 - 04:40 Permalink

Here's one for you, bitch., there was this old analog computer called a hive during tulip mania. Bees got orders from a queen creating local area networks that became wide area networks thus resulting in this thing called honey.It took a lot of work for the bees to create this elixer and sell it to humans to sell to other humans at tremendous profit. That was way before AA Milne created Pooh Bear who ate all the honey and got fat and Rabbit went neurotic.Why don't you forgive the inspired and stop hating?Life would suck if no one made allusions for fun. And you wouldn't get anywhere if you came here for news. Like, now that you have the facts what the fuck are you gonna do with them? Did you come here to find the secret fart of the djin to show you the way to spoils? Pick up another lamp, then, asshat. Go rub it.It's funny how some people think this site is a parking meter.

In reply to by Wayseer

hongdo Mine Is Bigger Tue, 12/12/2017 - 19:53 Permalink

Right, the amount of "money' floating around defined as debt is far higher today.  When the tide goes out - debt default - we will see what "assets" remain.  Who the hell knows whether it will be gold, bitcoin, treasuries, stocks,  or what.  But. like gold, bitcoin does not rely on counterparty debt but group confidence.  So it will be interesting.  

In reply to by Mine Is Bigger

The_merovingian jay35 Tue, 12/12/2017 - 11:35 Permalink

I know I’m just wasting my time, but anybody who really studied the history of money would tell you that the Tulip mania was actually much less impressive than what is generally reported. It all hinges on one single transaction (peak on the graph) and most academics agree that while the record exist, the transaction itself most likely never happened.Most of what the public knowns about the tulip mania has been written some 60 years after the fact and has been largely exaggerated. The real records still exist in the Netherlands for anybody to see.

In reply to by jay35

Mentaliusanything jay35 Wed, 12/13/2017 - 02:18 Permalink

Jay35, which one should I buy, which one will be more accepted, which one is the safest, which one will will make me rich. Oh! and which one is backed by the full faith and credit  of .. well you know which one came from the ether and will return to the ether.Just asking!! Seems to me to be a Jay Z sneeze or and Apple I phone 13 or and Apollo 13 ..... To The Moon Alice!!

In reply to by jay35

Bring the Gold fredquimby Tue, 12/12/2017 - 19:09 Permalink

I wholeheartedly agree. The multi century plan of the Central Banks to control all of humanity is something they will easily give up with zero fight.

NORFED silver Liberty dollars amounting to a fraction of bitcoin's present value was immediately stamped out upon discovery. The Silk Road showed beyond a shadow of a doubt the power of Bitcoin and still no action. Surely the architects of the modern era are ready and willing to hand over the reigns to an upstart. They've made enough money and have enough control that they are willing and able to share it.

There is absolutely nothing suspicious about Bitcoin's genesis and the fact that the Central banks and their government stooges in Intel agencies have take no substantial action to stop its proliferation. Yep this all squares with known history of the central banks and most technological advances of note e.g. Google. Everything is exactly as it appears and no deeper thinking is required. Good news! The good guys won without a shot fired.

In reply to by fredquimby

a Smudge by an… Bill of Rights Tue, 12/12/2017 - 11:15 Permalink

My local NPR affiliate is doing it's best to "explain" it to people.Financial expert Bud Tugley reports: "Bitcoin is kinda like this putty that comes from a huge machine and it's very technical and nobody knows what it eats." In other news, local man becomes a woman just so he can become a man again. More after this non-commercial announcement from our sponsors.

In reply to by Bill of Rights