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Dykam via flickr
A small correction has traditionally followed the maximum price, and now Bitcoin is trading just below $ 8 thousand. Thus, it took the most popular crypto currency only four days to recover from the sensational collapse. At the moment, the current capitalization of Bitcoin has exceeded $ 130 billion, and the dominance index climbed above 57.5%.
The last figure, according to forklog.com, indicates that the first crypto currency is still more popular than all the altcoins combined.
Despite the incredible popularity, some still regard Bitcoin as a kind of fraud and expect that the bubble will burst someday. Yet, there are still too many skeptics at the moment, so it's too early to talk about Bitcoin’s decline.
It's possible that the bubble will burst at that precise moment when the last skeptic decides to buy a crypto currency. Besides, it may well be so that it won’t burst at all, because the crypto-currency is supported by technologies that can be widely used in business and other spheres.
Below are the 7 most dangerous bubbles in the markets today.
1. Bubble in the Australian real estate market
Size: 4.9 trillion Australian dollars
Duration: 29 years
Increase in the market price: 510%
Evaluation: loan to income ratio 1.8 times higher than long-term average
Irrational behavior: Continued GDP growth for 26 years
Degree of risk: high
2. Bubble in the London property market
Size: £ 6 trillion
Duration: 25 years
Increase in the market price: 333%
Evaluation: Loan to income ratio 2.3 times higher than long-term average
Irrational behavior: long-term rates are lower; the "property ladder" mentality
Degree of risk: high
3. Bubble in the Hong Kong real estate market
Size: 20 trillion Hong Kong dollars
Duration: 12 years
Increase in the market price: 67%
Evaluation: the average cost of a house was 18.1 times higher than the average annual household income in 2016.
Irrational behavior: the inflow of money from the mainland, the belief in inelastic housing demand
Degree of risk: high
4. ETF at VIX
Size: $ 3 billion
Duration: 7 years
Increase in the market price: 705%
Evaluation: projected volatility in the market at historical low, average VIX value in 2017 is 11.4 against long-term average of 19.4
Irrational behavior: the desire to buy at a minimum
Degree of risk: high
5. Bitcoins
Size: $ 56 billion
Duration: 2 years
Increase in the market price: 1526%
Evaluation: the price is very sensitive to regulatory changes
Irrational behavior: speculation, the pursuit of new technologies
Degree of risk: high
6. FAANG (Facebook, Apple, Amazon, Netflix, Alphabet)
Size: $ 2.5 trillion
Duration: 12 years
Increase in the market price: 1363%
Evaluation: the price is not limited to the potential profit
Irrational behavior: the desire to buy at a minimum, the fear of missing opportunities
Degree of risk: high
7. High-yield emerging market bonds
Size: $ 935 billion
Duration: 9 years
Increase in the market price: 240%
Evaluation: current yield is half the long-term average
Irrational behavior: the pursuit of profitability
Risk level: medium/high
source: bloomberg.com
The last figure, according to forklog.com, indicates that the first crypto currency is still more popular than all the altcoins combined.
Despite the incredible popularity, some still regard Bitcoin as a kind of fraud and expect that the bubble will burst someday. Yet, there are still too many skeptics at the moment, so it's too early to talk about Bitcoin’s decline.
It's possible that the bubble will burst at that precise moment when the last skeptic decides to buy a crypto currency. Besides, it may well be so that it won’t burst at all, because the crypto-currency is supported by technologies that can be widely used in business and other spheres.
Below are the 7 most dangerous bubbles in the markets today.
1. Bubble in the Australian real estate market
Size: 4.9 trillion Australian dollars
Duration: 29 years
Increase in the market price: 510%
Evaluation: loan to income ratio 1.8 times higher than long-term average
Irrational behavior: Continued GDP growth for 26 years
Degree of risk: high
2. Bubble in the London property market
Size: £ 6 trillion
Duration: 25 years
Increase in the market price: 333%
Evaluation: Loan to income ratio 2.3 times higher than long-term average
Irrational behavior: long-term rates are lower; the "property ladder" mentality
Degree of risk: high
3. Bubble in the Hong Kong real estate market
Size: 20 trillion Hong Kong dollars
Duration: 12 years
Increase in the market price: 67%
Evaluation: the average cost of a house was 18.1 times higher than the average annual household income in 2016.
Irrational behavior: the inflow of money from the mainland, the belief in inelastic housing demand
Degree of risk: high
4. ETF at VIX
Size: $ 3 billion
Duration: 7 years
Increase in the market price: 705%
Evaluation: projected volatility in the market at historical low, average VIX value in 2017 is 11.4 against long-term average of 19.4
Irrational behavior: the desire to buy at a minimum
Degree of risk: high
5. Bitcoins
Size: $ 56 billion
Duration: 2 years
Increase in the market price: 1526%
Evaluation: the price is very sensitive to regulatory changes
Irrational behavior: speculation, the pursuit of new technologies
Degree of risk: high
6. FAANG (Facebook, Apple, Amazon, Netflix, Alphabet)
Size: $ 2.5 trillion
Duration: 12 years
Increase in the market price: 1363%
Evaluation: the price is not limited to the potential profit
Irrational behavior: the desire to buy at a minimum, the fear of missing opportunities
Degree of risk: high
7. High-yield emerging market bonds
Size: $ 935 billion
Duration: 9 years
Increase in the market price: 240%
Evaluation: current yield is half the long-term average
Irrational behavior: the pursuit of profitability
Risk level: medium/high
source: bloomberg.com
