Tech guru Gene Munster – sharing the latest take on market buzz from his research-driven, venture capital firm Loup Ventures – finds himself musing on the cryptology phenomenon of Bitcoin (BTC) currency. Though an expert on most tech aspects in the market, Munster is unsure as to the drive for the “dramatic” cryptocurrency price moves throughout 2017, let alone “if one even exists.” However, at the risk of sounding like a “non-believer” of the Bitcoin following, the research analyst dates to wager, “we’re in a near term bubble.”
Having seen the past back-to-back bubbles from dot-com to real estate, Munster has a seasoned eye to back his judgement as an “experienced financial market [observer.] Whether or not Munster is “still scarred” from the last bubbles does not change his opinion that “it sure seems like crypto is in a bubble.” That withstanding, Munster likewise does not see the bubble predicament and whether or not Bitcoin could also be “foundational technology” as “mutually exclusive.”
In fact, the analyst makes a key comparison point regarding the Internet bubble, noting that the dot-com world has revolutionized the way people approach daily life, even after the bubble burst: “When the dot-com bubble popped, it didn’t mean that the Internet was over. Few would argue that in the 17 years since the 2000 collapse, the Internet has transformed how humans work and live and has proven to be as impactful a technology as investors thought it might be in 2000, just a few years too early.”
Munster’s question is not whether or not Bicoin will impact “the future in how consumers store wealth and transact.” However, the analyst believes it bears acknowledging that from the very first day of 2017, the cryptocurrency’s price has skyrocketed well past 1,425% to over $15,000. Consider that just in the past few months, Munster has seen Bitcoin take off in value threefold and more. Therefore, “It’s more likely than not that Bitcoin is in a bubble and the price of Bitcoin will be extremely volatile, especially as more futures exchanges open,” asserts the research analyst.
However, what about fundamentals? From Munster’s stance, it is a challenge to use this cryptocurrency, from establishing digital wallets to the process of the use of an exchange to grasping how to proceed with transactions. Meanwhile, though transaction volume through Bitcoin has risen 60% year-over-year, a minority of retail locations are accepting the currency. Is it safe to bet on the price momentum rather than “the practicality of the currency?”
Ultimately, for Bitcoin to truly become “a viable store of value,” Munster concludes noting this demands “a viable community willing to trade that value.” Why?” Well, the analyst states in a nutshell, “because ‘value’ is only valuable to the degree it’s valuable to another person.”