Boom, Bust, and Bitcoin: Bitcoin-Bubbles As Innovation Accelerators

27 Pages Posted: 16 May 2020 Last revised: 18 May 2020

See all articles by Tobias Huber

Tobias Huber

ETH Zürich

Didier Sornette

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute; Southern University of Science and Technology; Tokyo Institute of Technology

Date Written: May 12, 2020


Bitcoin represents one of the most interesting technological breakthroughs and socio-economic experiments of the last decades. In this paper, we examine the role of speculative bubbles in the process of Bitcoin’s technological adoption by analyzing its social dynamics. We trace Bitcoin’s genesis and dissect the nature of its techno-economic innovation. In particular, we present an analysis of the techno-economic feedback loops that drive Bitcoin’s price and network effects. Based on our analysis of Bitcoin, we test and further refine the Social Bubble Hypothesis, which holds that bubbles constitute an essential component in the process of technological innovation. We argue that a hierarchy of repeating and exponentially increasing series of bubbles and hype cycles, which has occurred over the past decade since its inception, has bootstrapped Bitcoin into existence.

Keywords: Bitcoin, Money, Cryptocurrencies, Financial Bubbles, Technological Innovation, Economic Growth, Reflexivity

JEL Classification: E40, G01, O40

Suggested Citation

Huber, Tobias and Sornette, Didier, Boom, Bust, and Bitcoin: Bitcoin-Bubbles As Innovation Accelerators (May 12, 2020). Swiss Finance Institute Research Paper No. 20-41, Available at SSRN: or

Tobias Huber

ETH Zürich ( email )

Rämistrasse 101
Zürich, 8092

Didier Sornette (Contact Author)

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

Scheuchzerstrasse 7
Zurich, ZURICH CH-8092
41446328917 (Phone)
41446321914 (Fax)


Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Southern University of Science and Technology

1088 Xueyuan Avenue
Shenzhen, Guangdong 518055

Tokyo Institute of Technology

2-12-1 O-okayama, Meguro-ku
Tokyo 152-8550, 52-8552

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics