When a market price is significantly higher than its real value, it is easy to form a bubble and escape from the doom, which is the epitome of "bubble economy". "Bubble economy" is often accompanied by the ups and downs of commodity prices, but not all prices change radically can be attributed to the "bubble economy". Strictly speaking, "bubble economy" is caused by excessive speculation, which is caused by excessive commodity price deviating from the value of commodities and rising sharply before it falls sharply. It is an inevitable result of social capital being too concentrated in a certain investment field, resulting in the short-term expansion and decline of commodities in the field.

In twentieth Century, there have been many "bubble economy" waves. Among them, the most famous one is Japan's "bubble economy" which suffered from the "Plaza Agreement" in 80s. In the early 1980s, because of the sharp increase of fiscal deficit and foreign trade deficit, the United States hoped to increase the export competitiveness of products through the depreciation of the US dollar, so as to improve the imbalance of international payments. Against this background, in September 1985, the United States, Japan, Germany, France and Britain signed the Plaza Accord. After that, the agreement was strongly promoted in Japan, resulting in a sharp appreciation of the Japanese yen against the US dollar and a sharp expansion of the domestic bubble. Finally, the Japanese economic collapse due to the collapse of the real estate bubble has been known as the "lost ten years" (The Lost). Decade)。

"We should not worry about the difficulties of our neighbors." Japan's bubble economy is a valuable lesson for all countries in the world. Therefore, when a bubble appears in a certain area, it will attract wide attention. In recent years, the "virtual" monetary field has "bubble" in theory.

Take bitcoin, for example. According to the data on March 13, 1 bitcoin is equivalent to US $60000, which is 12 times that of 2020 and twice that of early 2021. It can be described as a "rocket" growth. On that day, the market price of bitcoin was as high as US $1.1 trillion, close to the value of Google's parent company alphabet.

In the "rich family" of virtual currency, not only bitcoin, but other kinds of currencies also show "rocket" growth. For example, Ethereum (Ethereum), binance coin (coin), tether (TEDA coin), the total market value in March 2020 are less than 5 billion US dollars, but a year later, when it reaches its peak in February 2021, the total market value is respectively 1.4 trillion US dollars, 330 billion US dollars, 250 billion US dollars. In particular, in a short period of one month, the market value of coin an increased by 9 times.

As mentioned before, when the price of a commodity seriously deviates from its value, the commodity begins to form a bubble. For bitcoin, its price is less than a penny from the time of birth, to the current US $60 thousand / dollar, the price soaring is an indisputable fact, so the accounting of its intrinsic value is the main basis for measuring whether bubbles are or not.

(2021-3-31)