I was talking to friends recently and though they love Bitcoin and the blockchain, they think Bitcoin is in a bubble. I don't think that's really a relevant statement. The prices of Bitcoin are extremely high, probably due to a lot of speculation, but at the same time that does not mean it's in a bubble.
The reason my friends think it is a bubble is, because prices are high, people are speculating people could at any moment lose hope in it, and since it isn't backed by any other asset, or trade, the Bitcoin would then fall. I find that the opposite is true. Something that is in a bubble usually is in one, because either people realize that the underlying thing that determines value of something else (think real estate and houses in mortgage backed securities, or .Com companies and their stock) is misrepresented, or institutions default. Bitcoin is not backed by anything besides a blockchain and the fact that people view it as a storage of value like gold. No entity can default in a way that causes the value of blockchain to decline.
This means that the only way blockchain would lose its value is if there is a general recession and people needed liquidity. However, since blockchain is viewed as a storage of value, the part of the community, which views it as one, would cause the price to stabilize, if not go up, in the same way as gold goes up in a recession.
Do you agree? Could Bitcoin even be a hedge against a recession? Do you think the price of bitcoin is going to fall? Either way, where do you think it will stabilize?