I’ve been spending the last couple of weeks watching the cryptocurrency markets seemingly lose their mind. Bitcoin went from a high of almost $20,000 per coin to a low of $8,300 as I write this on February 2nd. This may seem like a bubble that popped (and I believe that it is) but that doesn’t mean that all original value suddenly disappeared.
Bitcoin first passed the $8,300 mark on November 24th – a grand total of 10 weeks ago. I remember it distinctly because I was surprised it had continued to rise to $8,300 at all. Somewhere in the last 90 days a grand delusion set in (or market manipulation which I’m giving a lot of credence to) that caused prices to rise like a rocket through December.
This isn’t meant to be a post on cryptocurrency, but it is what got me thinking. Just because there has been a short-term bubble, doesn’t mean that there is a fundamental problem. Just as when the housing bubble burst, it wasn’t a sign that houses had suddenly become a bad bet generally. It was an opportunity to step back and understand what the value should be based on.
Most things in life are not a simple yes or no, good or bad. Most things are on a spectrum with answers usually existing somewhere in the middle. This is what is known as nuance.
Any given 10-word answer may be right in substance but wrong in particulars. Any given 100,000-word treatise may be right in particulars but wrong in philosophy.