2minutebitcoin on Nostr: Bitcoin's current adoption model is one of **exchange rate bubbles**. Due to group ...

Bitcoin's current adoption model is one of **exchange rate bubbles**. Due to group psychology, newcomers arrive in waves fuelled by two main factors:

1. ***decreasing information asymmetry*** – more resources to learn about Bitcoin -> more people are coming to the realization that bitcoins are indeed the best money.

2. ***increasing liquidity*** – buying bitcoins is more convenient and has fewer fees attached today than many years ago.

These waves result in an extremely volatile exchange rate. Regardless, once the tide pulls back and the weak hands fold, the price is a few multiples higher than before the wave.

-- an excerpt from the 2-minute version of Speculative Attack (2014): https://2minutebitcoin.org/blog/bitcoin-speculative-attack-on-the-dollar-2014