- Bitcoin’s $2 trillion market value is fueling a “too big to fail” narrative in the market
- Analysts counter this, citing the 1720 South Sea Bubble, which bankrupted Sir Isaac Newton
- The historical lesson is that market psychology and euphoria, not size, are the real risk to investors
Bitcoin’s rise beyond a $2 trillion market value has reignited a critical debate about market psychology. The milestone brought on a narrative belief within the broader crypto market, Henrik Zeberg, Head Macro Economist at Swissblock, quoted:
“Bitcoin cannot collapse because it has reached above 2 trillion USD”
Zeberg countered this notion by introducing a stark historical precedent: the South Sea Bubble of 1720. This event, which famously bankrupted Sir Isaac Newton, serves as a powerful warning. It proves that market psychology can overwhelm any asset, regardless of its size.
The 1720 Warning: When Sir Isaac Newton Lost a Fortune
In 1720, Britain’s entire nominal GDP was only £60–£70 million. The South Sea Company, however, reached a valuation of £150 million. This was nearly twice the nation’s economic output.
The South Sea Bubble soon after, famously wiped out investors, including Sir Isaac Newton. Analysts note this event is definitive proof that market psychology, not size, drives bubbles. Applying this 2x GDP scale to today, a similar bubble would imply a market value of $7.5 trillion.
Coin Edition analysts rightly pointed out that yes, valuations of magnitudes can still collapse, and that it happens when a rally is driven more out of sentiment than robust fundamentals. The team also laid out how markets tend to repeat emotional cycles, regardless of the technology.
Why Bulls Say This Time Is Different
Despite these historical warnings, Bitcoin’s expanding institutional adoption has created a “safety cushion.” This cushion was unseen in past bubbles. Analysts argue that widespread corporate and government integration could dampen volatility, even if corrections occur.
Source: X Market observer GandalfCrypto identified an inverse head and shoulders pattern forming on Bitcoin’s chart. This pattern signals a potential bullish reversal.
Related: Bitcoin Price Prediction: Analysts Eye $115K Breakout As November Seasonality Turns Bullish
The neckline sits around $115,000–$116,000. A breakout above this level could target $130,000. Maintaining support near $108,000 remains essential to confirm the structure.
Kiyosaki: ‘Hard Assets’ Are the Only Refuge
Meanwhile, financial author Robert Kiyosaki warned about an impending global crash and urged investors to seek refuge in hard assets. He stated that gold, silver, Bitcoin, and Ethereum offer protection from inflation and currency devaluation.
While his statements lacked specific timelines, they resonated with investors uneasy about rising debt. Critics, however, argue that his repeated warnings often amplify fear without substantiated data.
Related: Kiyosaki Warns of ‘Massive Crash,’ Urges Investors to Turn to Bitcoin and Ethereum
