IS BITCOIN A BUBBLE?

What do you mean "bubble"? How do we define a market bubble?
mr TFMonkey offered a definition:
A commodity is a bubble if the primary motivation to buy it is the increase in demand.

Of course, nothing is absolute in physical world: what is "primary"?
The intuition behind it is a majority of normie-investors -- people who are willingly risk their tiny shares but comprise together a dominant chunk of market.
Can we proceed with this definition?

Then the answer is YES, BTC is a bubble.
The hype about BTC is apparent.
E. Musk alone drives millions of individual buyers, and the only motivation he gives is THE DEMAND IN BTC.
Wild swings of BTC in the past testify for the speculative nature of the market...
And the very definition of BTC states the complete absence of intrinsic value in a BTC unit.

However, being a bubble does not tell us WHEN the bubble will burst.
We need to investigate whole host of other factors, most of which I am not even aware of.
Take for example USD, is it a bubble? Eh?
And so far it lasts almost 150 years DESPITE being mercilessly poked by FRS every heartbeat --
millions of powerless individual investors keep pumping it the best they can while obviously loosing value.
Ok, USD is not a pure bubble, in USA it is being ENFORCED by the govt upon the public,
so that the workers are pumping up the USD bubble contrary to their will.
However, other countries take measures to enforce alternative currencies upon their subjects,
and those subjects take measures to escape their respective national currencies by BUYING USD.
Thus the entire world is pumping The USD Bubble.
Still they do it voluntarily (given the local restraints) to minimize their local loss!
It is cheaper for a subject of a 3rd-world country to pay for USD inflation than to pay for his national currency inflation.
Thus USD rides on a comparative advantage: non-FRS banksters are greedier.
Today, BTC rides on the comparative advantage over USD.

The question is: will this advantage hold when the average BTC user start spending it?


Speaking of BTC spending, we address the most important issue of all times, the problem of value: What is the REAL value of BTC?
How much bread you can buy for 1BTC in a perfectly honest transaction?
Being a bubble (see the definition) tells us nothing about the real value of the commodity,
the commodity might be as useless as a pet-rock, or it might be some valuable but overpriced commodity, such is the most common case, or...
Could a bubbled commodity be underpriced? Since we do not know the real price we can not exclude this possibility!
The lack of the intrinsic value in BTC only reinforces this possibility -- the future "real" value of 1BTC is not limited from below nor from above.
As everyone is only buying and buying BTC, the buying power of BTC remains UNKNOWN.
Could it be that tomorrow when the bubble burst you can buy more bread for 1BTC than you buy today for the corresponding amount of USD?

// Professional economists rush in with "mathematical" models and insults.

The answer is laughably trivial though, way below the "intellectual" level of modern economics:
the amount of bread 1BTC buys depends on the willingness of a REAL PHYSICAL BAKER to accept BTC.
If the BTC hype you are riding right now will excite bakers you will have bread, if not, you starve.

Note, I am not saying it will not! I am saying that the real symbolic value of a medium of exchange is determined by bakers not bankers.
Yes, a really mean "real symbolic value", because a symbolic value that buys bread is just as real as hunger.

// We kick out professional economists for they have no theory of value to offer, and we proceed

How can we approach the estimation of the real symbolic value of 1BTC?
First we need to forget about money for a moment. Think about food.
No amount of money can satiate you unless a food producer, A PEASANT agrees, or being forced to give you food in exchange for your money.
If we exclude force from the equation (as is the case of BTC) the nutrition value of your money is determined by peasantry.
Assuming the hype wears out, dust settles, and peasants recognize BTC as exchange medium, the value of 1BTC is down to the fraction: total_food_supply / total_BTC_in_circulation.

Note this fraction has a dimension of food. Apparently we failed to include producers of clothing you need to wear every day.
Let's include them in our total_produce but we can do so if and only if they recognize BTC as a medium of exchange.
Going this way we will include everyone who produces anything of value, but we are not going to produce the magic number that expresses price of 1BTC in USD,
if you are still measuring everything in USD at this point, go figure the real value of 1USD first, then continue reading, or not.

We unsurprisingly conclude that the buying power of 1BTC is determined solely by the supply of GOODS.
The novelty of the present situation is that BTC currency is not universally recognized -- so that the corpus of REAL GOODS is almost entirely isolated from BTC -- but the situation is developing, and this is the aspect requiring investigation.
The size of the economy sector (pardon my french) served by BTC might be huge in monetary expression, but how big is it in bread units?
If BTC people can not exchange their coins for bread they starve just as well as any unenlightened oldtimer.
  

P.S.
IT is also important not to confuse value of a unit 1BTC (call it "buying power") and value of BTC as a currency system (call it "exchange medium utility"),
we were talking about the buying power so far, but on whole another level the BTC currency as a whole competes with other currencies in utility,
including aspects of convenience, inflation, maintenance cost etc etc, these are all major factors in the problem of BTC acceptance
and thus affect the buying power of 1BTC, but it is important to keep in mind the principal phenomenological distinction between these two notions for clarity of thought.