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This is Money Podcast

Is Bitcoin in a bubble? (Podcast cut)

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1650 Ratings

🗓️ 5 December 2017

⏱️ 5 minutes

🧾️ Download transcript

Summary

Bitcoin has risen more than tenfold this year and doubled in just seven weeks. But can it keep rising as adoption gets more widespread, does blockchain's promise justify the price, and does any of this matter as to whether it is in a bubble or not? In this excerpt from the This is Money podcast, Simon Lambert and Georgie Frost discuss Bitcoin's astonishing rise.

Transcript

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0:00.0

Open up, is it because it's now being seen as a little bit more legit?

0:03.9

Well, bubbles.

0:05.7

You need to look at what is a bubble.

0:08.3

A bubble is when the price of something detaches itself from the underlying value completely and just absolutely soars.

0:18.2

And there is a classic bubble chart, which I would advise anybody listening to Google

0:23.2

because it's always worth a look at. And you can have bubbles in anything. Tulips, famously,

0:28.7

the South Sea bubble, house prices, yeah, they were said to be in a bubble at a certain point,

0:33.7

the dot-com bubble, and now the Bitcoin bubble. Now, there are suggestions that Bitcoin cannot possibly be in a bubble

0:40.0

because people who say that don't understand that Bitcoin actually is useful

0:45.5

and Bitcoin is changing the world and the blockchain that is built on,

0:48.7

which is this ledger, this program that is this ledger decentralized,

0:52.9

actually has a path to change the world.

0:57.0

Now, I would agree that actually Bitcoin is pretty useful. Bitcoin is pretty interesting.

0:58.0

Blockchain is very interesting.

1:00.0

But just because that is a fact does not mean that Bitcoin is not in a bubble,

1:06.0

because Bitcoin has detached itself from that value.

1:09.0

Now there is only a certain amount of Bitcoin that can be

1:11.3

minted. It is very difficult to mine a Bitcoin. You need an awful lot of computing power. As the

1:17.4

world shifts towards it, as you see it become more and more mainstream, as more and more companies

1:23.0

put out a press release saying, yeah, we're going to accept payment in Bitcoin, or financial

1:27.5

companies say, yeah, well, you know, maybe we will do something with Bitcoin. And there's

1:31.0

some of the commodities exchanges are talking about enabling some way of tracking Bitcoin

...

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