In December of 2016, the cryptocurrency bitcoin was valued at a little over $600. Today it has reached nearly $18,000. So what's fueling bitcoin's increase in value? And with a 1,000-fold increase in bitcoin value over the past five years, are we staring down the barrel of a massive "bubble," similar to what happened with Tulips in the 1600s, the dot-com implosion, and the 2008 financial crisis?
An investment in bitcoin differs from traditional stocks and bonds because it does not pay revenue to the owner, such as a stock paying dividends. Bitcoin is very similar to gold in this regard. According to an article in Ars Technica: "Gold's value defies conventional market analysis in much the same way bitcoin's value does. Gold doesn't pay a dividend and only about 60 percent of the world's gold supply is devoted to jewelry or industrial use."
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