Cryptocurrency – The Best Innovation this Century Or Just Another Tulip Mania?

Almost four centuries have passed, and the Dutch tulipmania of the 17^th century is still referenced in the aftermath of contemporary economic, financial crises. Investigations into what drove the tulip speculation back then ignored market fundamentals – the same fundamentals many believe to be the driving force in cryptocurrency.

The roller-coaster ride of the blockchain-based currency has been, and will always make, the front-page news for the mainstream media, which is fond of likening it to and disassociating it from the infamous 1637 Dutch tulip craze.

There are those who believe that blockchain-based currency is far from a true madness. The increased frequency in its boom-and-bust cycle springs from the market’s reactionary mode to any good or bad news from regulators and central banks. This is mainly in Bitcoin speculation and how people think it is going to end up like – in a market crash.

Security issues related to cyber attacks also play a role. Also, the price fluctuation of the various cryptocurrencies raises suspicion about the sustainability of the policy frameworks and regulations regarding its full-swing adoption.

Whereas in the tulip mania, the average participant in the market knew about what was being promised; as 2022 progresses, there is still confusion about what these new currencies are, how they differ from other currencies or commodities; and whether central banks adopting them warrants any special policy attention.

With the worry that the crypto-currency surge end like the tulip bubble, various central banks who had viewed it with suspicion are now wary they will be left behind.

Despite these developments, one big question remains, is cryptocurrency the best innovation this century or just another Tulip Mania?

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