Do you worry about bitbell bubbles? Please focus on the stock and the real estate market


nnnIn this year, the rise in the price of digital money has made many people uneasy, worried that the market bubble has emerged. But in fact, compared with the traditional stock market and the real estate market, the value and impact of digital money market is fundamentally insignificant. People do not need to worry about this emerging market now. This also indicates that the digital currency is still in the initial stage, there is a lot of room for development.n
nnTranslated by: Inan
nThe rapid rise in digital currency prices in 2017 led most people to worry about the formation and outbreak of their bubbles. In fact, people need to worry about the stock and the real estate market bubble, rather than the digital currency bubble.n
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nLoose monetary policy n
nThe origins of the soaring value of various assets can be traced back to the 2008 financial crisis.n
nLehman Brothers bankruptcy incident and the ensuing financial turmoil makes the central banks around the world to adopt quantitative easing monetary policy. It can be said that the world financial system has been in trouble and needs to be improved to run again again.n
nn”The central bank’s loose monetary policy has raised asset prices to prevent investors from seeing the collapse of their asset value.”n
nnThe stock market is excited by false economic data, but it must be recognized that quantitative easing monetary policy will continue until the central bank determines that the second Great Depression will not come.n
nAlthough the quantitative easing monetary policy has gradually withdrawn from the stage of history, but to take out the market for the past few years, the situation appears too much liquidity still takes a long time.n
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nStock and real estaten
nAnalyzing the price of a digital currency is very difficult because the analyst has no method or basic principle that can be used to evaluate. Real estate and equity valuation is relatively simple.n
nOn average, real estate prices are on the rise, consistent with the growth in gross domestic product, but there may be parts of poor performance or poor performance.n
nThe company’s valuation is often dependent on their earnings and their price / profit ratio over a range. If the company’s earnings increase, its share price and market value will increase.n
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nFundamental n
nHowever, over the past few years, these basic things related to things gradually broken.n
nn”Prices in the stock and real estate markets have been high and seem to have nothing to do with broader economic performance.”n
nnSince 2014, analysts have been talking about real estate price bubbles in cities such as Toronto and London, and now prices have doubled.n
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nInitial stage n
nDigital currency is still in the initial stage, the oldest digital currency (bit currency) also appeared less than ten years. Investing in such an enterprise / technology may bring high returns, but also has a high risk.n
nIf you buy Bitco in 2010 – when the transaction price is only a few cents, then it has become a millionaire. But this high return does not mean that the bubble is emerging.n
nThis may also indicate that the technology behind the asset is getting people’s attention, the adoption rate is rising and the associated risks are falling. Even if the price rises rapidly, the total market capitalization of all digital currencies is less trivial than other assets (such as stocks, bonds or real estate). Only the market value of this company is five times the total market capitalization of all digital money.n
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nThe impact of the bubble burstn
nn”In addition to the rapid rise in prices, Bitcoin also attracts a lot of investors for digital money, but unless they are crazy gamblers, they will not put all the body on the above.n
nnThis contrasts with the stock market, and many people have invested most of their savings since they were young.n
nThey have always believed that investing in diversified stock funds is the best long-term option. People often buy their own ideal house, as a long-term investment, can be passed to the next generation.n
nThese two markets, any one of the collapse will make most of the people’s savings, and will have a wide range of economic impact. In contrast, Bitcoin is insignificant, and if it crashes, the government will not feel the need to intervene.n

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