Why Bitcoin is Not a Currency But a Speculative Real Asset

Abstract

Bitcoin’s price has seen a meteoric rise over the last years. Bitcoin is a real asset but what is not real is the value assigned to it. We argue that Bitcoin has reached bubble territory and will ultimately correct. However, we believe that in the intermediate term, the bubble can become even bigger in the process of financialization. It is to bear in mind that Bitcoin is not for the faint hearted but for speculative investors with very high risk tolerance.

(The content of this article reflects the authors' personal view on this topic.)

Keywords: economics, finance, cryptocurrencies, Bitcoin, financial bubbles

JEL Classification: G01