The Value of Bitcoin and the Speculative Nature of Cryptocurrencies

The value of Bitcoin is grounded in its real use case for black market transactions and circumventing regulations for overseas money transfers. However, a significant portion of the value of cryptocurrencies comes from speculative trading, resembling a gambling parlor disguised as an investing ecosystem. There is a possibility that the current situation with cryptocurrencies is a speculative bubble similar to the tulip mania of the seventeenth century, according to Nobel laureate economist Bob Schiller, who likened it to a naturally occurring Ponzi scheme.