Zyrille Corrine O.

Giron September 3, 2018

BSA 1-1 The Contemporary World

Bitcoin: A Bubble According to Economists

A Reaction Paper

Based on the video, economists believe that Bitcoin is the biggest bubble in human history.
As its value continues to have inconsistency, and fell below its lowest value amount this year. In
my own opinion, bitcoin has become a threat to banks and other financial institutions for it will
affect their transactions as bitcoin happens to be like a conventional dollar, euros, yen, etc. Critics
conclude that the surge of Bitcoin will be a huge fear to government and central banks, it would
be like a bubble that could burst and trigger the financial crisis.

Bitcoins are also known as cryptocurrencies, which are produced by computers all around
the world, using the free software. The performance of bitcoin has been a roller coaster ride, it
increases its value at a time, but it also decreases afterwards. I think that the economists were true
that bitcoin was a clever idea, but would not become a permanent part of the world. So, it was
really a bubble; a bubble who will burst but will eventually pop out and fade. According to the
video also, bitcoin and other cryptocurrencies remains to be a toy for some investors. I think it was
because their value and performance was so inconsistent which tends for the users to play with it
as some sort of free trial. However, if the performance of this cryptocurrencies would remain on
top consistently, it would affect the government and financial institutions a lot. That’s how great
their impact would be, so bitcoin was indeed a huge threat.

In conclusion, bitcoin and other cryptocurrencies tend to be an experiment, however the

results of this experiment are not yet fully completed and observed. We can treat bitcoin as a
temporary experiment that would not exist, permanently but can actually cause big impact towards
a country especially in its financial assets. As what economists say, these bitcoins can be referred
to as bubbles, as it is possible to burst when its value rapidly increase. Moreover, if this bubble
burst there’s a big tendency that it will trigger financial crisis, the most affected would be the
banks. But since its performance are inconsistent, this bubble would burst but will eventually fade
out after. We should still be thankful regarding that matter. I am also not totally in favor with the
existence of bitcoin, I think that it was not really a good idea. I think it was too risky to use and
has no sense of security as well. I also believe with what the economists say, bitcoin was indeed a
bubble.