Russia’s economic minister has compared BTC with a “soap bubble,” while seeing its influence on increasing tech investments as positive.
The term “bubble” in economics and finance is used to characterize an economic cycle of a fast and rapid rise price followed by a contraction. Bubbles can occur in a situation when investors bid beyond any real intrinsic value on a certain commodity or financial instrument, leading to exuberant market behavior. This scenario usually, but not always, results in an elevated price, which means investors are less willing to buy the now-overpriced asset, causing a massive sell-off and the deflation of the “bubble.”
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