Bitcoin Is Nothing Like The Dutch Tulip Bubble… Yet

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As one hyped mainstream media bulletin (Tesla invests 1.5 billion dollars directly into Bitcoin) follows another (Bitcoin broke through $51,000), classic finance is in full panic mode. Being overwhelmed with the media attention for their nemesis of crypto, they are forced to call on whoever will answer in order to preach their message that Bitcoin is a bubble waiting to pop.

In the past few days the MSM has been speaking about Bitcoin’s massive energy consumption, it’s untrustworthiness as a future currency, its link to criminal activities (less than 1% of crypto is used for this) and simply the fact that it might one day replace fiat currencies (and then what will the bankers do).

ECB

After ECB President Christine Lagarde last week already warned against Bitcoin and Nouriel Roubini followed up with a blistering attack, this time round it was European Central Bank governing council member Gabriel Makhlouf who said:

Personally, I wouldn’t put my money into it, but clearly, some people think it’s a good bet.

ECB’s Gabriel Makhlouf says Bitcoin’s rise is comparable to the 17th century Dutch tulip craze—which ended in collapse https://t.co/GNJIpqKPOD via @markets

— Bloomberg Crypto (@crypto) February 16, 2021

The financier, who is also governor of Ireland’s central bank, claimed that investing in Bitcoin was risky as:

Three hundred years ago, people put money into tulips because they thought it was an investment.

Artisan salary

With that line, he refers to one of the most famous investment bubbles of all time, the Dutch Tulip Craze of course.

No mania in #bitcoin yet.

During Dutch tulip craze, tulips traded 10x the avg “artisans” salary.

Avg salary for “skilled laborer” today is 32k approx.

32k × 10x= 320k

…and #btc has at least another 10x utility value of tulips.

Be patient and just #HODL

H/T Rich Ross ISI pic.twitter.com/ZNKLNKSuno

— Dan Tapiero (@DTAPCAP) February 15, 2021

Only problem form Mr Makhlouf is that one of Bitcoin’s biggest fans, Dan Tapeiro, had made the comparison himself earlier this week, and calmed everyone down with a simple mathematical calculation.

No mania in bitcoin yet. During Dutch tulip craze, tulips traded 10 times the average ‘artisans’ salary. Average salary for ‘skilled laborer’ today is 32k approximately. 32k × 10x= 320k …and bitcoin has at least another 10x utility value of tulips. Be patient and just #HODL.

In other words, Bitcoin is nothing like the Dutch Tulip Bubble craze… until it starts trading for around $300k any time soon.

The Dutch Tulip Craze was also 1 market cycle, it came up, it crashed and never recovered. While Bitcoin recovered from every crash until now.

denisismagilov / Depositphotos.com