Don’t understand the Bitcoin phenomena? Well, you are among the overwhelming majority of consumers and investors.
The problem is, those who don’t understand it are doing wild and dangerous things, like mortgaging their homes, to try and get aboard Bitcoin mania.
And they may be creating the world’s largest investment bubble since the dot-com era of the late 1990s.
LISTEN: Are Bitcoin and other cryptocurrencies here to stay?
Some are even comparing it to “tulip mania,” a 17th Century economic bubble in Holland, where the public became obsessed with the then-hard to acquire flower.
“Like Bitcoin, tulips became popular ‘because of their strangeness and rarity’ and because they were new, having arrived from the Ottoman Empire in the late 16th Century,” said Andrew Kenningham, chief global economist for Global Economics in London.
“Their prices rose astronomically between 1634 and 1637, and then collapsed.”
The good thing is that if Bitcoin does go the way of the tulip, it may take down some investors, but will likely have little impact on overall financial markets.
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