Comparing the bitcoin craze to the tulip bubble has reached an all-time high.
At least a few times a week now, headlines appear in mainstream media comparing bitcoin to those dreaded tulips. It’s gotten so bad that it seems like it might be time to put together an unwritten rule that any post, article, op-ed, etc. that compares the current bitcoin market dynamics to the Dutch tulip bubble should immediately be discredited. The first reason, and maybe the most important, is that the tulip bubble, while a ridiculous example of how unfounded exuberance can eventually destroy markets, is not even an accurate. (Fun fact: the tulips in demand at the time were actually infected with a virus that produced flowers with multicolored petals).Second, while the current market value of bitcoin and cryptocurrencies are looking like bubbles, comparing bitcoin to tulips is an overly simplistic way of dismissing a massive shift in technology. The general public needs better information about blockchain and cryptocurrencies, not more tulip comparisons.
Lessons learned from the tulip bubble
Since this seems like a good time to hopefully put all of this tulip business behind us, there are interesting takeaways that come out of the overused trope.In terms of the real value of the emerging cryptoasset economy, people are going to believe what they want to believe. There seem to be two camps emerging — mainly CEOs and name brand investors of legacy companies on one hand, and then the bitcoin-or-bust on the other (this group defies an easy label and is made up of a blend of business leaders, technologists, venture capitalists and a whole bunch of people on Twitter and Reddit.)So maybe there is a utility in constantly comparing bitcoin and other cryptocurrencies to previous bubbles. It’s a good reminder that valuations can be fickle and rapid, and that unexplained growth often comes with consequences. I just wish the bubble comparison could be more accurate. Comparing cryptoassets to real estate, or the dot-com boom and bust, or even the shale gas glut would be more useful than looking back to a misrepresented tulip bubble. But, I guess, those complicated markets aren’t as interesting as comparing bitcoin to fancy flowers.
But no, the tulips will live on
So what began as something of a bitcoin meme has now become part of the crypto culture and will inevitably become part of the history of the developing economy. And in that spirit, it’s time to talk about one of the latest crypto-related tulip projects. Send Crypto People Tulips is a recently launched project that uses snarky humor (and photos of tulips) to remind crypto investors, speculators, and all-inners that cryptocurrency markets are bubbling and that the insane valuations will undoubtedly lead to dramatic corrections. Users of the service can pay $5 to input the phone number of a friend or colleague. When crypto markets crash, Send Crypto People Tulips will then text a photo of tulip and a snarky quote with a crypto cliche. Capping off the epic year in crypto, where the market cap grew from $18 billion at the beginning of the year to $600 billion by the end of the year, with a project that reminds us all to stay humble and stay focused is probably not a bad thing. If nothing else, the snarky samples are at least good examples of things crypto headline writers should avoid in the future.