It very obviously is. Nothing can grow at such an insane rate and be a stable, long-lasting thing. No one knows how high it will go, but that it will collapse hard soon is 100% sure.
It could well be the first example of something going so high. It's unlikely but I wouldn't say it's 100% sure to crash.
And following Keynes the market can stay irrational longer than you can stay solvent.
Note: I'm not affiliated with that project, but I did see them present yesterday at Token Summit and it looked very interesting!
CBOE and CME to offer the next couple weeks.
Interestingly enough, S. Korea has declared bitcoin futures illegal today and S. Korea is the leading buyer of BTC.
Should be a good time.
That sounds like common sense, but common sense is not neccessarily right.
Imagine a German in the 1920s looking at the price of US dollars in Reichsmark. That can't be true, $1 for 1000 RM? Now 10000 RM? Nothing can grow at such an insane rate. Surely there is a dollar bubble, and it is going to crash.
What our German friend didn't realize was that his own currency was (hyper-)inflatory. USD were not overvaluated, they were stable. The current situation is similar, except instead of our currency being inflatory, the other one is being deflatory - this has the same effect on the exchange rate. It does not neccessarily mean there is tulip fever going on (although, to be honest, I can't disprove that).
That German person could have bought a loaf of bread in the morning for RM1,000 then sold it to his neighbor in the afternoon for RM10,000. There are no citizens in Bitcoinland dealing with inflationary prices in virtual bread. Anything you can buy with Bitcoin is priced in fiat, denominated in BTC at whatever the spot rate of the moment happens to be.
EDIT:
> What our German friend didn't realize was that his own currency was (hyper-)inflatory.
He absolutely did. Just like Zimbabweans did more recently.
Of course my argument doesn't align with what happened in Germany, that is my point. What I am trying to say is what seems at first glance like an overvaluation or a bubble could actually be in-/deflation, or in other words: currency supply and demand.
If you assume bitcoin eventually becomes as big as a typical national currency, it is currently even undervalued.
I'm thinking in a simple two-goods model here. "Currency" vs. "Products" - or "USD" vs "BTC". "Too much" supply of currency or "too little" supply of physical products drives the price up. In this model, that's the same as inflation, but you are right, as soon as there is a third good you can compare prices to that good and tell if it is inflation (all prices rise) or not (only the price of one good rises).
My point is not "it is inflation". Rather "it is inflation-deflation-supply-demand" (market reacting to changing supply and demand), as oppossed to "it is irrationality". If bitcoin is staying with us, and not banned etc., then demand for it will continue to grow faster than the supply will grow. I think the stable exchange rate of a fully established bitcoin will actually be at least a factor of ten higher than today.