Group polarisation may explain Bitcoin sell-off, and it could be contagious


  •   3 min reads
Group polarisation may explain Bitcoin sell-off, and it could be contagious

Whether Bitcoin is a bubble or not, a phenomenon called group polarisation could explain the recent sell-off, and technology could get caught up in the next phase.

"Double, double, toil and trouble" — as bubble expert William Shakespeare said. In Macbeth, the famous rhyme was a reference to a witch's cauldron bubble.  But can this saying be applied to Bitcoin? For that matter, can the word bubble be applied to technology stocks or even special purpose acquisition companies (SPACs)? And what has all this got to do with group polarisation?

The Bitcoin price has crashed. But in recent days, it has levelled out somewhat and is clawing back up the growth curve, slowly. The current price is around $40,000, compared with a recent dip to $32,000, still a fair way-away from $63,000 in April.

If recent falls in the Bitcoin price continue and it drops to $20,000, $10,000 or even less, then a mood of extreme pessimism may become contagious.

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