When charted, bitcoin's rapid gains resemble how stocks surged into the tech bubble before collapsing.
David Ader, chief macro strategist at Informa Financial Intelligence, matched a graph of the Nasdaq Telecommunications Index at its peak in 2000 to bitcoin's five-year run to all-time highs.
"This is the price chart for an overly frothy market, in my opinion. I just don't see anything quite as comparable to this in bubblelicious terms," said Ader, a former top-rated bond market strategist.
Bitcoin climbed more than 3.7 percent Thursday to a record of $4,802.74, up nearly five times in price this year and about 67 percent higher for August, according to CoinDesk.
Source: Informa Financial Intelligence
"I think it's going to come to a sorry ending," Ader said. "I don't know anybody who's actually used a bitcoin for any purpose legal or otherwise. This looks like an overly frothy market and frothy markets lose their froth."
Ader said he used the Nasdaq telecom index since many of those stocks led the Nasdaq composite's overall gains during the tech bubble. The Nasdaq telecom index shot up more than 700 percent from 1995 to 2000, before collapsing 90 percent in the next two years. The index remains about 75 percent below its record high.
Bitcoin's meteoric surge this year comes as many on Wall Street are becoming more interested in the digital currency and the blockchain technology behind it. New digital asset investment funds are rolling out and the Chicago Board Options Exchange is planning to launch bitcoin futures.
Many investors also bought bitcoin this month after it survived a relatively uneventful split on Aug. 1 into bitcoin and bitcoin cash, an alternative version supported by only a few developers. Bitcoin cash is up about 180 percent from its Aug. 1 low, to Thursday's price of $588, according to CoinMarketCap.
However, bitcoin could split again this fall because there's another upgrade proposal, and others have warned that the speculative forces behind bitcoin could quickly turn against it.
Here are a few of the alarm bells sounded this summer:
By percent change, analysis from Bespoke Investment Group shows how bitcoin's surge has already well surpassed that of any major stock market bubble.
Source: Bespoke Investment Group
That said, some well-respected names on Wall Street have also issued positive reports on the digital currency.
Lee and Moas both reason that bitcoin can climb to those levels if even a fraction of the trillions of dollars in gold or other traditional investments move into the digital currency.
Bitcoin has a market value of about $78 billion, and digital currencies overall are worth $170 billion, according to CoinMarketCap.
That makes the value of all digital currencies less than 5 percent of the more than $4 trillion inflation-adjusted value of stocks during the tech and telecom boom, said Chris Burniske, author of the upcoming book, "Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond."
"If people think this is the 'big bubble,' then they don't have an appreciation for how big the idea of cryptoassets really is," he said.
Many digital currency enthusiasts agree there is speculation in the digital currency. But they note that, just like the dot-com bubble, companies that were able to utilize the underlying technology then became global giants.
Go here to see the original:
Bitcoin's nearly five-fold climb in 2017 looks very similar to tech ... - CNBC
- Bitcoin price | index, chart and news | WorldCoinIndex - April 22nd, 2019
- Analyst: Bitcoin (BTC) Likely to Soon See Massive Volatility ... - April 21st, 2019
- Bitcoin Cash - Wikipedia - April 21st, 2019
- Bitcoin heads for mass market adoption as Millennials get onboard - April 21st, 2019
- Major Bitcoin hard and soft forks. Where are they now? - April 21st, 2019
- Bitcoins Long Road to Privacy | Crypto News Monitor | The #1 ... - April 21st, 2019
- Bitcoin [BTC] mining could go nuclear; Belarus emerges as ... - April 21st, 2019
- Crypto Traders Bullish Bitcoin (BTC) Call Goes Viral Plus ... - April 21st, 2019
- Benefits of Trading with Bitcoin Live Bitcoin News - April 21st, 2019
- Bitcoin Exchange Binance Confirms Delisting Of Bitcoin SV - April 21st, 2019
- How To Explain Bitcoin To Your Friends & Family ... - April 21st, 2019
- Bitcoin's Path to Retake $20,000 Could Be Slow and Painful ... - April 21st, 2019
- Cryptocurrency Bear Market Waning, Going Through Accumulation ... - April 21st, 2019
- What is Bitcoin? The Complete WIRED Guide | WIRED - April 18th, 2019
- Bitcoin Price Today - Live Bitcoin Value - Charts & Market ... - March 16th, 2019
- Suite of Crypto Services to Leverage Nasdaq Framework ... - March 16th, 2019
- Bitcoin | Definition, Mining, & Facts | Britannica.com - January 13th, 2019
- News - Bitcoin News - Page 952 - January 6th, 2019
- Bitcoin | Bitcoin Price | Bitcoin News | BTC | Info.Binance.com - December 24th, 2018
- Bitcoin Technical Analysis - FXStreet - December 20th, 2018
- Bitcoincharts | Charts - December 20th, 2018
- Bitcoin Crypto-Economics Index - coindesk.com - November 29th, 2018
- Bitcoin (BTC) Price, Chart, Info | CoinGecko - November 17th, 2018
- Bitcoinker - The Best Bitcoin Faucet, Claim Every 5 Minutes! - November 17th, 2018
- Africa Dominates P2P Bitcoin Exchange Paxful With $64 Million ... - November 10th, 2018
- Bitcoin Dips Below $7,000, Hitting Lowest In 2 Weeks - August 8th, 2018
- Things you need to know Bitcoin.com - July 29th, 2018
- Bitcoin - Bitcoin Price Live, BTC Value, Mining, BTC to USD ... - July 10th, 2018
- Digital Currencies and Financial Inclusion: Revisited | CGAP - May 19th, 2018
- Bitcoin vs. Electronic Money: Digital But Different | CGAP - May 19th, 2018
- Must I pay tax this year if I transfer bitcoin from ... - April 4th, 2018
- Will a 1099-B form work best for reporting bitcoin ... - April 4th, 2018
- Bitcoin (BTC) price: News & Live Chart - Trading Analysis ... - March 29th, 2018
- Bitcoin USD - BTCUSD Overview - MarketWatch - February 28th, 2018
- Buy Bitcoin IRA | Bitcoin IRA Investment & Retirement Account ... - February 28th, 2018
- Bitcoin Fees Have Become Infeasible - Bitcoin News - December 23rd, 2017
- Bitcoin's incredible surge takes it above $9,500 - Nov. 27 ... - November 27th, 2017
- Warning Signs About Another Giant Bitcoin Exchange - November 23rd, 2017
- What Is Bitcoin, and How Does It Work? - The New York Times - October 6th, 2017
- Why Beanie Babies make for a better investment than bitcoin - MarketWatch - September 5th, 2017
- Bitcoin's price hit $5000 last week. It's still a dumb investment - Los Angeles Times - September 5th, 2017
- Bitcoin dips another $300 after China's cryptocurrency crackdown - CNBC - September 5th, 2017
- IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments - Investopedia - September 5th, 2017
- Sequoia, IDG to Invest in China Bitcoin Mining Giant - Bloomberg - September 4th, 2017
- Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions - CoinDesk - September 4th, 2017
- Bitcoin $5,000: Currency Hits New Record High | Fortune.com - Fortune - September 2nd, 2017
- Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off - CoinDesk - September 2nd, 2017
- Searching for the future of currency, major companies try Bitcoin technology - PBS NewsHour - September 2nd, 2017
- Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required - newsBTC - September 2nd, 2017
- Literally just one huge chart showing bitcoin's incredible rise to $4800 - MarketWatch - September 2nd, 2017
- BTC-e's Big Claim: Bitcoin Withdrawals to Begin Tomorrow - CoinDesk - CoinDesk - September 2nd, 2017
- As bitcoin surges in price and popularity, so do the complaints - CNBC - August 31st, 2017
- Here is how Indians are minting a fortune in bitcoins - Economic Times - August 31st, 2017
- Why Miners Are Mining Bitcoin Cash and Losing Money Doing It - CoinDesk - August 30th, 2017
- Bitcoin jumps nearly 70% for August to record high, offshoot 'bitcoin cash' falls to more than one-week low - CNBC - August 30th, 2017
- Bitcoin Foundation seeks legal protection from US currency regulation - The Independent - August 30th, 2017
- Bitcoin's epic rise leaves late-1990s tech bubble in the dust - Economic Times - August 30th, 2017
- 99Bitcoins | Buy Bitcoin, Bitcoin Guides & Reviews for ... - August 29th, 2017
- Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies - CNBC - August 29th, 2017
- Bitcoin Meets Zcash: Developers Test Tool for Trustless Trades - CoinDesk - August 29th, 2017
- Russian Regulator: Bitcoin Should Be Limited to 'Qualified Investors' - CoinDesk - August 29th, 2017
- As bitcoin and rivals surge, so too have complaints to the CFPB - MarketWatch - August 29th, 2017
- Is Bitcoin the New Gold? - TheStreet.com - August 28th, 2017
- This Swedish guy bet all his life savings on bitcoin and it made him 100 times richer - Business Insider Nordic - August 28th, 2017
- How To Gain Bitcoin Exposure Inside Of Your Traditional Brokerage Account - Seeking Alpha - August 28th, 2017
- Value of all digital currencies hits record around $160 billion as ... - MarketWatch - August 28th, 2017
- Why Motherboard Is Capitalizing 'Bitcoin' Again - Motherboard - August 28th, 2017
- New Bitcoin.com Charts: The Bitcoin Ecosystem at a Glance - Bitcoin News (press release) - August 27th, 2017
- Expert Predicts Bitcoin Will be Worth up to $20000 in the Next Three Years - Futurism - August 27th, 2017
- Does Bitcoin Have a Mining Monopoly Problem? - Fortune - August 27th, 2017
- Bitcoin poised to challenge record after recovering from correction - MarketWatch - August 26th, 2017
- Bitcoin Prices Rise But Fall Short of All-Time High - CoinDesk - CoinDesk - August 26th, 2017
- Bitcoin and Artificial Intelligence Can Help Fight Sex Trafficking ... - Fortune - August 26th, 2017
- Bitcoin Investors, Beware: The IRS Is Coming for Your Vast Riches - TheStreet.com - August 26th, 2017
- Bitcoin's Lightning Network Moves Closer to Compatibility - CoinDesk - CoinDesk - August 26th, 2017
- A sketchy Satoshi has popped up to promote his new blockchain - The Verge - August 26th, 2017
- Bitcoin And Why You Think You're Right (Even When You're Wrong) - Seeking Alpha - August 26th, 2017
- Bitcoin and Ether rise, helping take crypto space above $150 billion market cap - MarketWatch - August 23rd, 2017
- Bitcoin Prices Are Up Over $100 Already Today - CoinDesk - August 23rd, 2017
- MGT Capital Raises $2.4 Million to Expand Bitcoin Mining Operation - CoinDesk - August 23rd, 2017