Crypto Space “Absolutely, Definitely in a Bubble”, Says Wikipedia Co-Founder Jimmy Wales

  • Wikipedia co-founder Jimmy Wales has recently argued the cryptocurrency space is in a bubble that will eventually pop.
  • He noted the space is in need of "real journalism," and presented one of his projects as a potential solution.

Jimmy Wales, the co-founder of the largest free-content reference website in the world, Wikipedia, has recently stated the cryptocurrency space is “absolutely, definitely in a bubble” which is eventually going to pop.

Wales, speaking at the Blockshow conference in Berlin, started his speech by noting he believes the space is in “serious need of real journalism.” He then added his views on the market, saying:

‘Right now, we are in a bubble. The crypto world is absolutely, definitely in a bubble. I don’t think there’s many people who would deny that.’

Jimmy Wales

Notably, the Wikimedia Foundation has been accepting bitcoin donations since 2014. The organization started accepting the flagship cryptocurrency shortly after Wales revealed he had been “playing” with it.

During his speech, Wales echoed skepticism towards various blockchain projects that are set to “tokenize everything,” as part of his reasoning as to why the space is in a bubble. The online encyclopedia’s co-founder is a known skeptic when it comes to initial coin offerings (ICOs).

In an October interview with CNBC, he warned investors of the risks around the popular practice, and added:

“I think blockchain is a super interesting technology but there are a lot of fads going on right now. There are a lot of these initial coin offerings which are in my opinion are absolute scams and people should be very wary of things that are going on in that area.”

Jimmy Wales

At Blockshow, Wales went on to describe some of the problems journalists face nowadays, and presented one of his new projects, a Wikipedia-style news source, as a potential solution to the problems the industry faces.

As for bitcoin and other cryptocurrencies, he noted that he wasn’t going to claim the bubble would pop tomorrow, as “things might get even more intense first.” Wales added, however, that “the thing about bubbles is that you never know when they’re going to end… it might pop tomorrow, but more importantly, it will pop.”

The entrepreneur’s words come as the flagship cryptocurrency sees its price drop to $7,350 at press time, from nearly $10,000 last month, according to CryptoCompare data. Last year, bitcoin surged from little under $1,000 to nearly $20,000, before its price came down to about $6,800 and subsequently recovered.

BTC Now Below $8300, but Tom Lee Says ‘2020 Should Be Great for Bitcoin’

Siamak Masnavi

On Thursday (January 23), Thomas Lee, Co-Founder, Managing Partner, and the Head of Research at independent research boutique Fundstrat Global Advisors, while appearing as a guest on CNBC's post-market show "Fast Money", predicted that "2020 Should Be Great for Bitcoin" and explained why.

According to data from CryptoCompare, at press time (around 10:20 UTC on January 24), Bitcoin is trading at $8,273:

BTC-USD 24 Hour Chart on 24 Jan 2020.png

This is the first time that Bitcoin has traded below the $8,300 level since January 14, as you can see in the two-week BTC-USD price chart shown below:

BTC-USD 2 Week Chart on 24 Jan 2020.png

Since Bitcoin reached $9,151 at 01:00 (UTC) last Sunday (January 19), the BTC price has been steadily falling, perhaps in anticipation of the "traditional" slowdown in Bitcoin trading around the time of the Chinese New Year (which, this year, starts on 25 January 2020 and ends on 11 February 2021). This expected drop in Bitcoin trading volumes was something that Arthur Hayes, Co-Founder and CEO of crypto derivatives exchange BitMEX, predicted in a tweet he sent out yesterday:

However, Lee, does not seem concerned about the currently falling prices of Bitcoin and altcoins in the crypto market.

Lee, who was appearing on Fast Money to give his views on the stock, bond, and crypto markets, was asked by the shows's host, CNBC news anchor Brian Sullivan, if he was still bullish on Bitcoin.

Lee replied:

"Yeah, 2020 should be great for Bitcoin because you got number one the halvening happening -- the block reward for miners getting cut in half -- that's a good supply demand change. I think last year the White House killed the Bitcoin rally with their opposition, but with the presidential election cycle underway, it's not gonna be in the headlines, and that's bullish for Bitcoin. And then with geopolitical tensions in the Middle East, I think that's good for crypto... We're getting a lot more interest in it from our clients."

It is worth remembering that two weeks ago Lee tweeted about a report he had published on January 9 about the outlook for crypto in 2020. According to this report, there are three positive convergences/catalysts for Bitcoin in 2020:

  • Bitcoin halving/halvening (which is expected to take place around 12 May 2020).
  • Geopolitical tensions in the Middle East.
  • 2020 U.S. Presidential Election

Lee said at the time that the bottom line is that "financial markets tend to discount 1-3 months, and maybe 6 months (max)" and therefore the "highest probability is halvening not priced in."