Some people are trying to say that Bitcoin is in a bubble right now, but the fact is that’s just not true. There are fundamental forces sustaining a Bitcoin price floor.
Here’s a common way you see Bitcoin as a Bubble get mentioned:
Cryptocurrency skeptics warn of another dot-com bubble, but that's where Amazon and Google started https://t.co/D4ppndgsvz
— CNBC (@CNBC) August 7, 2017
But no, Bitcoin is definitely not purely driven by speculation. Speculation is a factor, to be sure. But if you look at the times Bitcoin has had massive sell-offs, it’s not been driven by speculators bailing out.
No, there is fundamental value in Bitcoin. Because Bitcoin resists government activity, it has intrinsic value to criminals who wish to engage in illegal activities. Criminals love Bitcoin. Hackers use it to receive payoffs when they lock up computers. Drug dealers and human traffickers use it to take payments for their activities. Online gambling rings love it.
When was the last big sell-off of Bitcoin? When Silk Road was rolled up by the US Government. Silk Road, the Tor-based black market website, had grown large before founder Ross Ulbricht was arrested.
But until the criminal uses of Bitcoin are abated, the currency will continue to have value. This isn’t a bubble, folks. It’s a money laundering operation.