7 Ways the Cryptocurrency Bubble Could Burst

One of the biggest business stories of 2017 was the incredible rise of bitcoin (CCC: BTC-USD) and other forms of cryptocurrencies. At the beginning of 2017, the price of bitcoin was still under $1,000 before beginning a meteoric rise that would peak in December at just under $20,000.  Soon thereafter, the price of bitcoin and other cryptocurrencies plummeted. In 2018 alone, bitcoin prices started at $12,000, spiked to above $17,000, plummeted back down to just a shade over $7,000, before rising back to $10,000. Other cryptocurrency prices have been just as volatile. Yep, to say cryptocurrencies are redefining volatility is an understatement!

Part of what makes cryptocurrency prices so unstable is that they are exceedingly difficult to value. Unlike stocks or other asset classes, cryptocurrency tokens are not tangible pieces of a business or physical assets that can be measured. Hence, there are no earnings or commodity prices that can be used to fairly gauge how much each cryptocurrency should be worth.

Because of this, opinions still run the gamut of what to expect from cryptocurrencies in the future. True believers, like Xapo CEO Wences Casares, think bitcoin prices could go as high as $1 million while famed investor Warren Buffett believes cryptocurrencies will experience a "bad ending." Who's right? While I can't see the future, click ahead to see seven reasons why the cryptocurrency bubble could burst.

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