Cryptocurrency Bubble to Burst from Bitcoin's Oversupply?
A recent analysis of supply and demand shows that Bitcoin's rapid growth will end not because of the lack of buyers, but due to the oversupply.
The analysis stems from the dot-com bubble of the late 1990s, when any company with .com in its name instantly received huge market growth. However, the dot-com bubble burst when a huge number of new IPOs .com flooded the market. For some time the market absorbed them, but when the market finally entered the correction stage, it knocked the bottom out of all these enterprises, and only the strongest of them survived.
So, how the supply, which is limited to 21 million units ( in fact, much less ), can be redundant?
The answer is multifaceted. First, Bitcoin's hard forks create new derivatives from the original currency. For example, the hard fork Bitcoin Cash has now created a completely new Bitcoin with a market capitalization of $26 billion. Whatever you think about BCH, the reality is that the supply has increased. Hard forks Bitcoin Gold and Bitcoin Diamond have done the same.
In addition, the release of futures for Bitcoin may well bring about the cryptocurrency's crisis. Despite the fact that the sale of futures has become an indicator of accepting the digital currency, the reality is that Bitcoin's numerous derivatives will now deplete the flow of investment in the original currency. According to the analysis: "... as there are more and more ways to invest in the cryptocurrency, the flow of investment that has raised Bitcoin's price will soon be depleted and it will happen much faster than people expect."