Source: Cryptonews Original Title: Bitcoin is no tulip, says ETF analyst Eric Balchunas Original Link: https://crypto.news/bitcoin-is-no-tulip-says-etf-analyst-eric-balchunas/

Bitcoin’s Resilience vs. Historical Asset Bubbles

Eric Balchunas, a leading ETF analyst, has challenged the frequent comparisons between Bitcoin and the Dutch tulip mania of 1637, citing the cryptocurrency’s 17-year survival and multiple recoveries as evidence of its durability as an asset class.

Balchunas noted that Bitcoin remains up approximately 250% over three years and gained 122% in 2024, despite recent pullbacks of about 27% from its October high. He emphasized that Bitcoin has come back from multiple massive shocks to reach new highs and has survived 17 years, unlike tulips which “rose and collapsed in a few years, punched once and knocked out.”

The analyst pointed to the cryptocurrency’s resilience through major market events including exchange hacks, banking crises, the 2018 initial coin offering downturn, pandemic volatility, and high-profile project failures. Bitcoin ETFs have held significant assets under management with institutional participation providing support during market downturns.

Non-Productive Assets and Value

Balchunas argued that non-productive assets can retain value without generating income or dividends. “Bitcoin and tulips are both non-productive assets. But so is gold, so is a Picasso painting, rare stamps — would you compare those to tulips? Not all assets have to be productive to be valuable,” he stated.

Gold’s market capitalization does not produce yields, yet the precious metal maintains significant value based on scarcity and historical acceptance as a store of value. Bitcoin proponents argue the cryptocurrency serves a similar function with additional utility in remittances and corporate treasury applications.

Supply Dynamics and Market Indicators

The 2024 Bitcoin halving event reduced new issuance, tightening supply as ETF demand increased. On-chain metrics showed significant accumulation by larger holders during recent price declines, with a substantial portion of Bitcoin supply remaining unmoved for over 12 months.

Market valuation metrics such as the MVRV Z-Score indicated periods of undervaluation compared with historical bull market triggers. Balchunas concluded that market participants were “overanalyzing” short-term price movements, suggesting that asset consolidation periods are typical in long-term investment cycles.

The Dutch tulip mania lasted approximately three years from 1634 to 1637, with prices collapsing after reaching peak levels. Bitcoin, launched in 2009, has experienced multiple boom-and-bust cycles while establishing new price highs following each downturn.