For those who don’t know, tulips (yes the flower) were the original bubble. People bought tulips not because they wanted tulips, but because they wanted someone else to buy them for more. While this is true for stocks as well, stock prices reflect actions and performance of the company. A stock goes up when the value of the company goes up.
Bitcoin is an asset, so it is in a similar category.
Whenever I ask why my friends have Bitcoin, they have it just to sell it for more to someone else, who is also probably buying it to sell for more to someone else.
The underlying functions of btc see no change to reflect change in price, people just buy it because they want the next guy to pay more for it.
It seems to be just like a tulip.
Purpose of Bitcoin that I could find:
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Drug money (unironically, it’s original use)
Corrupt government store of wealth (if you live in China or countries with mass inflation)
Tax fraud (this is why I feel it will likely get btc ban from being accepted at legal businesses, too much work for the IRS to protect against fraud)
Hedge to inflation (as mentioned in the corrupt government situation but more details below)
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By design, btc has infinite deflation, more people exist each day, while btc is finite. As such it cannot become a currency. (Why spend it today when you could get significantly more with that same Bitcoin tomorrow?)
In contrast to other investments, like stocks, with growth clearly reflecting events of the company, or real estate with clear income potential. Bitcoin is more like digital gold, which normally acts as a hedge to inflation, but bitcoins actual price is far from moving at the rate of inflation or other hedge assets.
Also, please do confuse blockchain technology with Bitcoin. Blockchain can be useful, and something made with blockchain can be useless.
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