Some say, institutions have brought a terrible hype to the world of crypto pumping up digital currencies insanely high and as euphoric the promise is, as painful the fall will be.

The best known accelerator in this trend is Microstrategy, who had a disputable past in the dotcom bubble era and now has a pioneer role in the current rising of Bitcoin. I think this fact triggers certain reflexes in most individuals, others can  just face the unnatural growth of coin prices in markets.

 Those who are screaming "crypto bubble" often can see the stocks only; money without its context, without examining what are the currencies behind. I believe comparing two phenomena is only possible if its parameters are comparable or can be transformed to be able to compare to each other.

 Let's see first...

 ...in a simplified way - what the dotcom bubble was.

At the beginning of the early Internet age, companies rose from the shadows to the promise of a magical new technology. Many of those became overvalued without equivalent performance and production solely based on their unfulfilled promises or dreams. Investors just pushed them up with endless money without clear vision until the point of truth. Most of them were unable to fulfill their promises so the investors were trying to get back their money. Free falling stock prices, bankruptcies, etc.  

Let's examine this one first and find the common points. One of them is the companies and blockchain projects. The companies have stocks/shares and the blockchain projects have crypto currencies. Those value and capitalization are measuring the values of the company/project. They are clearly comparable. So in this case we can label it as "crypto bubble" but only in the meaning if all of the blockchain projects fail. Otherwise we can just say "Bitcoin is a bubble" for example.

But what if the whole crypto sector is going to fail? Could the entire sector fail? The next lines may be telling a bit more.

There is another common point here in between dotcom and crypto bubble. What the Internet used to mean once, back in the days, nowadays is the blockchain technology. In my opinion blockchain technology is comparable enough to the Internet in the manner of its revolutionary nature. I don’t believe it is necessary to prove that the monetary system of the world is going to transition to this blockchain technology. Right? So can you imagine now the whole crypto sector is going to fail? Yes, in the case if the digital monetary transfer would fail as well.

So the next question is, could the world monetary system of digital transition fail, too?

Each and every government in the globe has an unmanageable level of debt. It can't be decreased - since the gold standard is away - so the only way is to inflate them,  which they are doing well enough. 

Needless to say or prove how much reserve currency (now called USD) was printed last year and its consequences. We are already deep in the crisis of fiat money. It is already irreversible: the global digital currency can't be bypassed, so - in that manner - this transition won't possibly fail, unless the whole world economy collapsed and we’d be going back to the stone age.

Sidenote: in the age of dotcom bubble there was no fiat crisis like the actual one. This is a huge difference between the two phenomena. Therefore I can't imagine how this parameter could be converted to make a liable comparison...

 So, while the world is running towards a digital currency and a brand new monetary system, still trillions of dollars are being printed by the year, some people believe the crypto is a bubble, and linear stock market and fiat is the base of comparison. Doesn't it sound kind of twisted logic?

Let's go onward...

I referred to stocks before as "linear". What does it mean? It is coming from the nature of traditional markets. Exchanging on any regular market is not affected by so-called “network effect" because of its structure. There are brokers sitting between the assets and clients. There are no cross connections between client and client, exchanging assets. This is because crypto is driven by network effect basically - because it is an instant peer to peer system - therefore has an exponential growing (and falling) nature. When this exponentiality is drawn on a chart it can trick the ordinary observer and of course, he would scream "bubble" immediately.

This way I can't think is a valid expectation that the crypto should behave in a similar way as linear stock markets. For me, it also proves that we can't talk about the "crypto bubble" because the price and value characteristics can not be compared directly.

As I see there are not many significant points in common when comparing crypto to the traditional market, hence saying "crypto bubble" doesn't seem an accurate or right definition.

Although, a possible meaning could be “bubble blowing”. It is nothing else than the Fiat crisis which undoubtedly does blow the "crypto bubble" by its devalvation. 

Let's go back to Microstrategy, who had a decreasing financial revenue by the years - which is also determined by this cash inflationary trend. Some say that hard assets, such as gold or silver are handed already and their markets are heavily manipulated. In contrast Bitcoin draws a continuous uptrend and growth (see long term price moving average) on a hot technology. So, as I see this is a logical investment they could have made - and have made Tesla since then.

Otherwise, this blowing is just a matter of perspective: from one point of a shrinking world the opposite pole can be seen as exponentially  expanding. (Discussed before why...)

Summarizing this kind of bubble effect, we may say "Yes, it is a bubble". A bubble which is pumping and dumping but its median trend will surely be increasing and accelerating for years. I don't regret getting affected by crypto, because it gives hope and a chance for break-through for people. Since my short experience being part of this since - reading tweets and discussions, watching NFT auctions - I faced that kind of philanthropy which I have never seen in the fiat world before. Sometimes you may feel "that's insane" but when you dive in deeper, you can understand what the network effect is, and how it is supporting this growing technology.  

Okay, I do agree finally. This is all a bubble. An infinitely flexible bubble being blown by the lungs of more and more ordinary people.