Investing.com -- Bitcoin’s surge in value has drawn parallels to the infamous Amsterdam tulip bubble of the 1630s, with an analyst arguing Bitcoin is traded 24x7 across the world, making it a “global bubble” rather than a local one.
While the outlook for Bitcoin remains uncertain, the limited supply of 21 million coins, with only 1.1 million left to be mined, has provided an attractive proposition for investors.
Bitcoin has already surged nearly sevenfold since early 2023, 10-fold since mid-2020, and 100-fold since early 2017.
By comparison, gold, which did not have the same supply limitations, rose around 20 times during the 1970s after the U.S. severed its ties to the gold standard, and has increased nearly 10 fold since 2002.
With such dynamics at play, Bitcoin could continue to soar "to the Moon, to Mars, and to infinity and beyond,” the analyst says.
The global demand is compounded by high-profile endorsements, including former U.S. President Donald Trump’s recent support for Bitcoin, further driving the rally.
The analyst highlighted MicroStrategy’s bitcoin hoarding idea, where it has accumulated over 331,000 Bitcoin, continue to fund Bitcoin purchases through stock and debt offerings.
While this has helped the price of Bitcoin and the company’s stock, it raises concerns about the sustainability of this strategy if Bitcoin’s price eventually stabilizes or falls.
“In effect, it is a perpetual prosperity rocket ship on course to infinity and beyond. The price of Bitcoin goes up. The company raises more money to buy more Bitcoin, which continues to go up in price as does the stock price of MicroStrategy...and so on to infinity and beyond.”