Economist Henrik Zeberg has warned that Bitcoin is showing signs of a financial bubble, comparing it to past speculative manias. His warning coincides with Bitcoin trading around $120,000, hitting an all-time high of more than $123,000 earlier today. Despite its success, Zeberg warns that the cryptocurrency has technical vulnerabilities. He thinks these risks might lead to a market correction as soon as 2025.
On discontinued social media platform X, formerly Twitter, Zeberg shared his alarm in a July 30 post. He blamed the current state of the market on years of loose monetary policy after the 2008 financial collapse. The economist compares Bitcoin’s current path to other speculative episodes like the Dot-com boom and the steam engine craze. The 2008 financial crisis was the initial catalyst behind a wave of speculative bitcoin investment.
As impressive as Bitcoin’s rise this year has been, zeberg is not outright bullish. What’s most important, he insists, is to underscore the high-risk nature of the cryptocurrency market. These risks, he cautions, could trigger a major crash as early as 2025.
There is plenty of disagreement about the cryptocurrency market’s current health. Still, these critics say, the market—and Bitcoin especially—aren’t in bubble territory yet. As recent price action shows, Bitcoin’s price is still very volatile and reactionary, heavily swayed by factors such as monetary policy.
Once again, bitcoin’s extreme price volatility would, by itself, classify it as a high-risk investment. Invest with caution, know you could lose a significant amount of money.
