But there's one aspect of the digital currency that's been misconstrued: comparisons.
For as interesting as bitcoin is right now, it's still a small piece of a much larger puzzle. It's useless to try to compare bitcoin to stocks, to gold or even to other digital assets. Bitcoin is simply incomparable.
It isn't Apple Inc. (AAPL) - Get Report or Alphabet Inc. (GOOGL) - Get Report or Facebook Inc. (FB) - Get Report . It's something else entirely, and that's OK. And if you think otherwise, you're one of the dumbest on Wall Street.
Of course it makes sense why investors would jump to compare bitcoin to other assets -- stocks can explode to record prices in a short time and attract a cultish following. Then, the bubble often pops under the weight of Wall Street expectations.
But when I asked blockchain expert and Bitcoin Center NYC founder Nick Spanos to explain to me how bitcoin isn't a bubble when a historical price chart looks eerily like a stock bubble would, he had a clear response: "You shouldn't be using the same kind of chart."
Bitcoin isn't like stocks, he explained. Its perceived value is entirely derived from a psychological phenomenon. It has value because we've assigned it value. Apple's stock, for example, is valuable because of the actions of the company's management and the utility of its tech products.
"Apple," wealth advisor Marc Singer of Singer Xenos said sarcastically, "has this thing called an iPhone...It's a highly tangible company with real things."
You can hold an iPhone and understand why it's sold, but you can't hold a bitcoin and perceive any real value. Some argue the same could be said for gold -- it's worth something because someone said so. And like gold, bitcoin has a finite supply.
Evan though you can't hold bitcoin like an iPhone X, that's unlikely to keep people from wagering on its value.
"Because of the cyber aspect of bitcoin, its price has run up to absurd levels," Singer said. He pointed to the dramatic swing in price bitcoin experienced in 2011, when it fell 93% in five months, as one reason to be cautious.
"If it falls 93% once, it can do it again," Singer noted. A 93% tumble back then meant bitcoin traded as low as $2.25 from around $30. The same move today would mean a plunge from nearly $18,000 to as low as $1,260.
Many evangelists say that's not likely, though. Bitcoin could move to between $30,000 and $40,000 in the next year, Spanos said. Within the next five years, it could soar to $500,000. Part of its success is that it's different from other cryptocurrencies, even as they soar, too.
"The only blockchain that really works is the blockchain rewarded with bitcoin," Spanos said. The billions of participants on the network keep it secure -- more secure than most.
"Bitcoin is the golden goose of cryptos," Spanos said. "It's the goose that lays the golden crypto eggs." It's the leader in the crypto industry, and all other successful digital assets are essentially offshoots of the No. 1 -- bitcoin.
Just don't compare it to Apple.
Checkout the best of "Dumbest Thing On Wall Street"
- Anyone Who Resists the Rise of Legal Cannabis Is Among Dumbest on Wall Street
- Sears CEO Doing the Dumbest Thing on Wall Street This Black Friday
- Why Walmart Haters Have Been Beyond Dumb
- Bitcoin Naysayers: Dumbest Thing on Wall Street
- Young Male Tech Executives Are Big Risks to the Bottom Line
- Overly Optimistic Tesla Bulls Are the Dumbest Thing on Wall Street
- Apple iPhone X Doubters Are Straight Up Dumb
- Microsoft and Call of Duty Prove That You Are Dumb to Think Gaming Is Dead