Over the years, we have grown used to people gunning for cryptocurrencies, regularly calling them bubbles. This has been the go-to term for most of the world’s largest financial organizations.
However, what we see in a report from China Money Network is a doozy because the term was used in relation to blockchain, not cryptocurrencies. The remark came from Chinese billionaire Cai Wensheng, who is best known for photo filter mobile app Meitu.
“Blockchain is the biggest bubble the world has ever seen, but bubble is the catalyst for technological revolution. Similar to the industrial revolution and the dot com bubble, the underlying technology changed the world after the bubble burst. We must embrace bubbles now, as missing the bubble will be the biggest risk,” he said during a group chat.
In contrast to the banks that call Bitcoin a bubble, he apparently does not see the blockchain “bubble” as a bad thing.
However, it is questionable whether this is the “biggest” bubble ever. The US sub-prime lending crisis in 2008, for example, forced the government to pump $900 billion into bailouts.
On the other hand, the blockchain market barely reached $213 million in 2016 and has not grown much larger. Projections put its value at around $4 billion in 2022.
Cai went on to say “there are always a small number of people who recognize a disruptive future trend while the majority remain blind to it.”
In his opinion, companies that missed on ripe opportunities include Lenovo, Haier, and China Mobile. They all got involved in their respective markets far beyond the nascent stages, failing to profit from the boom that followed the hype.
Cai’s words ring peculiar in light of the fact that many banks and governments laud blockchain technology as something showing significant promise although cryptocurrencies are persistently associated with bubbles.
The Union Bank of Switzerland, for example, made a clear statement on the merits of blockchain technology, saying it has applications in many different areas of industry.