Bitcoin: The Longest Running Mania – Tulips of the 21st Century?


Dr. John Taskinsoy a

ABSTRACT

Almost four centuries later, the Dutch tulipmania of the 17th century is always mentioned as a mania
and used as a reference point in the aftermath of contemporaneous economic and financial crises
since the late 1990s. Studies investigating what drove the tulip speculation throughout 17th and 18th
centuries ignored market fundamentals, which we believe were the driving forces in Bitcoin price
speculation and the ensuing crash. Bitcoin mania is far from a true madness, the increased frequency
in its boom-and-bust cycle since 2017 comes from the cryptocurrency market’s extreme reactionary
mode to any good or bad news from regulators and central banks (the Fed and ECB in particular) as
well as security issues related to cyberattacks. In a matter of several months, the price of Bitcoin
skyrocketed from $2,000 in April 2017 to the intraday high of $20,089 on December 17, 2017. The
potential Bitcoin bubble occurred in the end of 2017, Bitcoin price surged from $5,600 to $20,089 in
October – December 2017 and crashed in January 2018.

Keywords: Bitcoin; Asset Price Bubbles; Booms and Busts; Tulipmania; Blockchain
JEL classification: D84, E32, E44, G01, G12, G38, O40, R31

 This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
a Corresponding author email address: johntaskinsoy@gmail.com
Faculty of Economics & Business – Universiti Malaysia Sarawak (Unimas), 94300 Kota Samarahan, Sarawak, Malaysia.

1
1.0 Introduction

Sizable booms and busts in this decade1 have rekindled the debate on the resemblance of the Bitcoin
mania to that of the Dutch tulipmania of 1634-37 (i.e. first recorded speculative bubble) and the U.S.
dot.com phenomenon of 2000-01, both of which were brief as opposed to the Bitcoin mania which is
going strong despite its erratic price fluctuations. Nonetheless, a sizable body of economists would
agree that all three manias appear as cases of a speculative mania; however, Garber (1989) believes
“the extremely high prices reported for rare bulbs and their rapid decline, reflects normal pricing
behavior in bulb markets and cannot be interpreted as evidence of market irrationality”, so it was not
a mania. Garber’s view that tulipmania was based on fundamentals was criticized by Kindleberger
(1978). In the literature, Bitcoin mania is used interchangeably with synonyms “speculative mania”,
“Ponzi scheme”, “speculative bubble”, or “irrational exuberance”2 (Samuelson, 1957; Garber, 1989).3

Bubbles (in equity and debt markets, assets, commodities, or cryptocurrencies) usually form through
changes in investor behavior underpinned by rational or irrational expectations of a rapid escalation
of asset prices (see Brunnermeier, 2008; Evans, 1991; West, 1984). Every financial/economic bubble
follows a boom-bust cycle (see Shiller, 1987), and at the end of a bubble, pessimism enters the market
causing some investors to sell off their positions (profit-taking), which may turn into a sizable market
correction or even a crash if panicked investors start selling assets at any price in a herd mentality4
(Calvo & Mendoza, 1997; for centuries of folly, see Reinhart & Rogoff, 2009; Kindleberger, 1978). The
patterns of a bubble-formation show similarities throughout financial history as explained by Minsky
(1992) in his paper titled “The Financial Instability Hypothesis” which identifies five stages in a credit
boom; (i) displacement (awareness), any paradigm-shifting event (i.e. advent of the Internet, financial
innovation as in mortgage-backed securities); (ii) boom (asset-mania), opportunistic and optimistic
investors enter the market causing a noticeable surge in daily volumes; (iii) euphoria (extraordinary
valuations in prices), even ordinary people become avid buyers; (iv) profit taking, pessimism enters
the market; (v) panic, asset prices plunge as capital flight to quality (safety) occurs.

1 Paradigm-shifting developments since the late 1990s (i.e. Internet, mortgage-backed securities, shadow banking, digital
revolution. blockchain, cryptocurrencies, etc.) have posed serious challenges to global financial stability and the resultant
financial crises have caused sizable disruptions in the supply of credit. Contemporaneous crises since the 1990s have made
financial booms-and-busts more frequent, longer lasting and more disruptive. Interested readers can check out Taskinsoy
(2007; 2008a, b, c; 2012a, b, c; 2013a, b; c; 2018a, b, c, d; 2019a, b, c, d, e, f, g, h, i, j, k, l, m, n, o, p, r, s, t, u, v, w).
2 During the Clinton administration, the term “irrational exuberance” was first coined by the former Fed Chairman by Alan

Greenspan in a 1996 speech, "The Challenge of Central Banking in a Democratic Society". Later, the economist Robert
Shiller has used irrational exuberance as the title of his book published in 2000.
3 After Facebook’s official announcement of its Libra cryptocurrency project, President Donald J. Trump slammed Bitcoin

and Libra by tweeting “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is
highly volatile and based on thin air”.
4 Flight-to-quality before, during, or after a financial crisis can be substantially disruptive if orchestrated in a herd mentality.

2
Asset price bubbles whether based on rational or irrational future expectations of growth occur when
prices of assets and commodities deviate significantly from their intrinsic values (e.g. Lambertini et
al., 2010); further, bubbles can turn into speculative or mania if prices are fueled by speculation rather
than basic fundamentals. In that regard, Garber (1989) argues that tulip bulbs5 had no intrinsic value
and were not a vital agricultural commodity (i.e. easily reproduced with unlimited quantity), thus the
relevant price movements of rare and unique tulip bulbs were based on market fundamental theories
of asset pricing. Although a rare single Semper Augustus bulb was sold for as high as 6,000 guilders
(Mackay, 1852), which equaled a skilled worker’s 20 years of wages (see Table 1); the results of the
Garber’s (1989) study indicate that the tulipmania may have been a brief speculation and a potential
bubble, but not “obvious madness” (Garber, 1990). With additional demand in France along with the
new entrance of non-professional buyers in the market, prices of bulbs quickly rose in 1635 and a
bubble was formed when prices of common bulbs surged for a month (January – February 1637).

Table 1: Guilder Prices of Tulip Bulbs (1637, 1722, and 1739)

January 2, 1637 February 5, 1637 1722 1739
Admirael de Man 18 209 ---- 0.10
Gheele Croonen 0.41 20.5 0.025*
Witte Croonen 2.2 57 0.20*
Switsers 1 30 0.05 ---
Semper Augustus 2,000+ 6,290 ---- 0.10
Zomerschoon ---- 480 0.15 0.15
Admirael van Enchuysen ---- 4,900 0.20 ----
Fama ---- 776 0.03* ----
Admirael van Hoorn ---- 65.5 0.10 ----
Admiral Liefkens ---- 2,968 0.20 ----
Source: Garber (1989)
* Sold in lots of 100 bulbs; + This price was based on July 1, 1625.

1.1 Comparing Tulip and Bitcoin Manias

While tulip is a commodity, Bitcoin is analogous to a commodity; nevertheless, both are produced by
farmers (miners (nodes) for bitcoins) who work and make decisions independently. The production
of each requires energy, for instance growing tulip bulbs need lots of sun and minting of bitcoins via
a digital mining process uses vast amount of electricity. For a cost effective and efficient production,
individual tulip producers may decide to join cooperatives; in the case of Bitcoin, miners can reduce
processing time and energy use by joining mining pools. Although rare and very unique tulip bulbs
(i.e. Semper Augustus) were used to exchange for various consumer goods, land, or even a luxurious
house (Table 2); Bitcoin on the other hand is a cryptocurrency as a medium of exchange and accepted

5 The first tulip bulbs and seeds were sent from the Ottoman Empire to Vienna in 1554, but the botanist Carolus Clusius and
his work at the University of Leiden made the tulip gain popularity around 1590s.

3
by thousands of merchants and individuals. Despite inconsistency in the recorded tulip price data
from the 1930s, Garber (1989) characterizes the data as a “blend of apples and oranges"; at the peak
of tulipmania on February 5, 1637 a single bulb of the Semper Augustus was valued at 6,219 guilder
(Figure 1), would have been about $80,3626 - for conversion from euro to dollar, €1 = $1.11 is used,
which is a lot more than Bitcoin’s peak price of $19,666 on December 17, 2019 (Figure 2).

Table 2: Basket of Goods Allegedly Exchanged for a Single Bulb of the Viceroy
Goods Price Goods Price
Two lasts of wheat 448 Four tons of beer 32
Four lasts of rye 558 Two tons of butter 192
Four fat oxen 480 1,000 lbs. of cheese 120
Eight fat swine 240 A complete bed 100
Twelve fat sheep 120 A suit of clothes 80
Two hogsheads of wine 70 A silver drinking cup 60

2,500 Dutch guilders (florins)

Source: Wikipedia

Source: Garber (1989)

Figure 1: The Price Surge of Semper Augustus (1923-1937)

6 According to the International Institute of Social History, one florin in 1637 had the purchasing power of €11.51 in 2016.

4
 Source of data https://www.buybitcoinworldwide.com/price/
Figure 2: The Price Surge of Bitcoin (2016-2017)

True that the Dutch speculation has been quite a legend, but we share the view of Garber (1989) that
there was not enough evidence with accurate and consistent data to suggest that the tulip speculation
qualifies to be a mania; if it were in fact, a sizable body of economists would have made references to
the tulipmania in the pre-WWII academic literature. Although Mackay (1852) makes reference to the
tulipmania, his work is incomplete and his price analysis of various tulip bulbs compares as Garber
(1989) described “apples and oranges”, which resulted in a serious misalignment in prices (i.e. tulip
prices at the peak of the speculation (February 1637) were compared with prices two centuries after
the tulip collapse). Even Kindleberger (1978) did not discuss about the tulipmania in his book whose
title starts with the word “Manias” because the event and the resultant crash was not instigated by
either misguided and misaligned monetary decisions or policy errors. Just like the tulipmania in the
early 1600s, the dot.com phenomenon of 2000-01 (the Internet bubble), the mortgage debacle of
2006, the global financial crisis of 2007-08, and the Bitcoin mania are examples of speculative asset
prices and markets in which they operate are driven by herd mentality or fads (Calvo, 1997; Shiller,
1987; Shiller & Pound, 1986; Caamerer, 1987). A great majority of economic and financial crisis are
banking related (Reinhart & Rogoff, 2009) and are explainable by the economic fundamentals such
as inflation, unemployment, interest rates, monetary policies (expansive or contraction of the money
supply) by central banks (Azariadis & Guesnerie, 1986; Shell & Stiglitz, 1967).

Many economists view Bitcoin as a speculative asset class, not a currency; due to its extreme volatility,
Bitcoin’s likelihood of becoming a global reserve currency is almost impossible. This paper compares
the movements of prices of Tulips and Bitcoin during and after the alleged mania.
5
2.0 Literature Review

The financial crisis literature makes reference to three manias throughout four centuries of history;
the most famous one of them is the Dutch tulipmania (1634-37) in Holland even though economists
including Garber (1989) and Kindleberger (1978) do not view it as a real madness. Other two manias
were originated in the UK. Canal Mania (1790-1810) occurred in England (Dyos & Aldcroft, 1969); by
1793, a speculative frenzy resulted in a twentyfold increase in canal building schemes (see Mitchell,
1975); as a result, the amount of capital authorized skyrocketed, increased more than thirty times
(e.g. Acheson et al., 2009; Gayer et al., 1953). Railway Mania of the 1840s took place in the UK and
Ireland; at its peak in 1846, close to 300 Railway Acts were passed by the British Parliament but only
two-thirds were built, some of these railway companies later collapsed (i.e. insufficient capital) or
acquired (or merged) plus few of them were set up to divert investors’ money fraudulently into non-
railway operations (see Bryer, 1991; Ellis, 1954; Glynn, 1994; Harding, 1848; Smith, 1848).

Two hundred years after the alleged tulipmania, Mackay (1841, 1852) had described the UK Railway
Mania of the 1840s as “another delusion”7. The old question of whether the Dutch tulipmania was a
real mania or was based on market fundamentals is still debated among economists and scholars to
this day. The tulip-bulb craze strongly underpinned by “the madness of crowds” (Mackay, 1841) was
not a mania (Garber, 1989; 1990), it was more of a speculation that caused tulip fever; in turn, frenzy
speculators right before the collapse in February 1637 created an illusion of crowds that turned even
non-professional and poorer investors into avid buyers; however, following a month of speculative
bull market, the tulip bubble (i.e., craze, fever, madness, mania) ended by investors who understood
crowd and mob psychology, or herd mentality (Dreman, 1977; Dash, 1999; Menschel, 2002).

Economic and financial bubbles8 (speculative or non-speculative), manias (rational or irrational), and
crises follow boom-bust cycles that involve five similar phases (Kindleberger, 1978); (i) displacement
occurs when investors become aware of a paradigm-shifting technology (i.e. blockchain), product (i.e.
cryptocurrencies), financial innovation (i.e. adjustable-rate mortgages), or glut of dollars globally due
to historically low interest rates; (ii) financial or economic boom fostered by increasing optimism of

7 The Scottish journalist Charles Mackay published the book “Extraordinary Popular Delusions and the Madness of Crowds”
in three volumes: "National Delusions", "Peculiar Follies", and "Philosophical Delusions" (Mackay, 1841, 1852).
8 Tipper and See-Saw Time (1621), Tulip mania (Holland) (1634–1637), South Sea Company (British) (1720), Mississippi

Company (France) (1720), Canal Mania (UK) (1790s–1810s), Panic of 1819 (US) (1815-1818), Panic of 1837 (US) (1834-
1837), Specie Circular of 1836 (US), Railway Mania (UK) (1840s), Panic of 1857 (US), Melbourne Australia land and real
estate bubble (1883–1889, crash in 1890–91), Encilhamento ("Mounting") (Brazil) (1886–1892), US farm bubble and
crisis (1914–1918, crash 1919–1920), Roaring Twenties stock-market bubble (US) (1921–1929), Florida speculative
building bubble (US) (1922–1926), Poseidon bubble (Australia) (1969–1970), Gold and Silver bubble (1976–1980), the
dot-com bubble (US) (1995–2000), Japanese asset price bubble (1986–1991), Asian financial crisis (East & Asia Pacific)
(1997), United States housing bubble (2002–2006), China stock and property bubble (2003–2007), the 2000s commodity
bubbles (2002–2008), and cryptocurrency bubble (2011–2018); see https://en.wikipedia.org/wiki/Economic_bubble.

6
future prospects draws investors to enter the market which forces asset prices to rise, speculators
jumping on the bandwagon results in a further increase in asset prices; (iii) euphoria (Exuberance)
instigated by the delusion (or illusion) of crowds causes asset prices to go through the ceiling, at this
stage capricious investors act on the basis of irrational behavior and both psychological and economic
forces determine asset prices; (iv) profit-taking is usually the early warning sign of a potential crash,
those investors and speculators who understand mob psychology get out of market in time before the
bubble bursts, and “those who are unable to resist being swept up” are always “the consistent losers”
(Garber, 1989); (v) panic (crash) causes asset prices to plunge (free fall), maybe even faster than they
initially rose (for longer discussion and more extensive review, see Brunnermeier, 2008; Caamerer,
1987; Calvo & Mendoza, 1997; Dreman, 1977; Samuelson, 1957; Azariadis, 1981; Mackay, 1841; Dash,
1999; Kindleberger, 1978; Shell & Stiglitz, 1967; Shiller, 1987; Shiller & Pound, 1986; Smith, 1848).

The literature on causes and implications of bubbles has grown enormously since the late 1990s,
which provided us with many synonyms to differentiate one bubble from another; as such, financial
bubble, asset bubble, price bubble, economic bubble, property bubble, stock market bubble, housing
bubble, commodity bubble, real estate bubble, technology bubble, etc. (Abreu & Brunnermeier, 2003).
What is a bubble? Although each bubble has its own unique dynamics fortified by a confluence of
fundamental and psychological forces (driving or contributing), an economic or financial bubble (the
term "bubble" emerged with the 1711–1720 British South Sea Bubble) can be described as a situation
(environment) in which asset prices substantially exceed their intrinsic values that are determined
by market-driven fundamentals (Kindleberger & Aliber, 2005; King et al., 1993; Garber, 1990, 2000;
Malkiel, 2007; Shiller, 2005). Bubbles usually have a negative connotation, but they can form without
irrational investor behavior, speculation, or exuberance (to gain an understanding of bubbles and
financial crises, see Allen & Gale, 1998, 2000, 2007; Blanchard & Watson, 1982; Brunnermeier, 2001).

Non-speculative bubbles are argued to be rational, in other words, they form on the basis of market
fundamentals not through psychological forces or the delusion of crowds. We have already mentioned
previously that our interpretation of the tulipmania is consistent with Garber (1989), we share his
view that the tulipmania might have been many things (i.e. craze, fever, speculation, fad, irrational
behavior, and exuberance), but was not a mania; we argue the same for Bitcoin mania, which was not.
Garber argues that the market for tulip bulbs was stable until 1634 due to limited access by non-tulip
growers; by 1635, non-professional traders entered the market plus the futures market developing
in 1636 allowed fractional trading by poorer people (whole tulip bulbs were too expensive for them),
these along with the additional demand from France drove the speculation. Just like the tulip bubble,
similar developments played a pivotal role in the formation of the Bitcoin bubble (2011-18); Bitcoin

7
was not very volatile until the end of 2016 because the cryptocurrency market was in infancy stages
and was mainly limited to small groups of Bitcoin miners (nodes), investors/enthusiasts (Table 3).

Table 3: Historical Corrections of Bitcoin (BTCUSD)

Correction Correction # Days in Bitcoin high Bitcoin low Decline Decline

No
start date end date correction price $ price $ % $

1 8 Jun 2011 15 Dec 2011 185 31.00 2.00 -94% 29.00

2 12 Jan 2012 27 Jan 2012 16 7.38 3.80 -49% 3.58
3 17 Aug 2012 19 Aug 2012 3 16.41 7.10 -57% 9.31
4 6 Mar 2013 7 Mar 2013 2 49.17 33.00 -33% 16.17
5 21 Mar 2013 23 Mar 2013 3 76.91 50.09 -35% 26.82
6 11 Apr 2013 12 Jun 2013 60 266.34 70.00 -74% 196.34
7 19 Nov 2013 19 Dec 2013 30 1,242.00 600.00 -52% 642.00
8 5 Jan 2014 11 Apr 2014 95 1,000.00 440.00 -56% 560.00
9 16 Sep 2014 29 Mar 2015 200 465.86 252.74 -46% 213.12
10 30 Nov 2013 14 Jan 2015 411 1,163.00 152.40 -87% 1,010.60
11 10 Mar 2017 25 Mar 2017 16 1,350.00 891.33 -34% 458.67
12 25 May 2017 27 May 2017 3 2,760.10 1,850.00 -33% 910.10
13 12 Jun 2017 16 Jul 2017 35 2,980.00 1,830.00 -39% 1,150.00
14 2 Sep 2017 15 Sep 2017 14 4,979.90 2,972.01 -40% 2,007.89
15 8 Nov 2017 12 Nov 2017 5 7,888.00 5,555.55 -30% 2,332.45
16 17 Dec 2017 22 Dec 2017 5 19,783.06 13,800.00 -31% 5,983.06
17 22 Dec 2017 5 Feb 2018 14 13,800.00 6,200.50 -55% 7,599.50
18 5 Sep 2018 16 Dec 2018 100 7,361.46 3,236.27 -56% 4,125.19
19 17 Dec 2017 16 Dec 2018 365 19,783.06 3,236.27 -84% 16,547.79
20 27 Jun 2019 15 Dec 2019 195 13,017.12 7,116.28 -45% 5,900.84

Source of data: https://www.ccn.com/bitcoin-crash-the-history-of-bubble-bursts

2.1 The Perceived Image of Bitcoin Mania

Bitcoin originated in cyberspace as a network of electronic cash but diffused into investors only in the
middle of 2010. Bitcoin practically began its arduous journey to stardom with the price of $0.00 since
its intrinsic value (if any) was arbitrarily negotiated between nodes (miners) and Bitcoin enthusiasts
(Wallace, 2011). With establishment of the first Bitcoin exchange BitcoinMarket.com (now defunct),
a bitcoin user swapped 10,000 BTC for an order of two pizzas9 from Papa Jones in Florida – USA (see
Kristoufek, 2015; Phillips & Gorse, 2017). Just like the tulip’s immediate acceptance “...by the wealthy
as a beautiful and rare flower, appropriate for the most stylish gardens” (Garber, 1989), Bitcoin as the
first successful cryptocurrency, created by the mysterious Satoshi Nakamoto (a pseudonym), was
accepted and trusted by people for its enormous future prospects (Nakamoto, 2008; as currency, see

9 The most pricy pizzas ever bought (i.e. 10,000 BTC at $19,873 each (December 17, 2017) would have been $198.7 million).
Another unbelievable story goes like this; a Norwegian man (Kristoffer Koch) bought 5,000 BTC for $26.60 in 2009 (paid
$0.0053 per bitcoin, worth almost $100 million as of Dec. 17, 2017). In terms of value, Kevin’s story is the most amazing
one, who bought 259,684 BTC for about $3,000 in 2011 (which would have been worth over $5 billion on Dec. 17, 2017).

8
Baek & Elbeck, 2015; Bartos, 2015; Blundell-Wignall, 2014; Bouoiyour & Selmi, 2016; Cermak, 2017;
Ciaian et al., 2016; Chiu & Koeppl, 2017; David, 2014; for evolution of money, see Davies, 2002).

Beginning in 2011, non-miners (nodes) entered the Bitcoin trade in noticeable numbers, attributable
to the establishments of now-defunct BitcoinMarket.com (March 2010) and a Japanese-based Bitcoin
exchange Mt. Gox (July 2010) along with the milestone achievement of Bitcoin taking parity with US
dollar (BTCUSD) in the first quarter of 2011. As a result, Bitcoin experienced its first boom-bust cycle,
the price of bitcoin rose from $1 in April 2011 to $31 in June 2011 before losing 94% of its value and
collapsing back to $2 in December 2011 (see Table 1). As Garber (1989) indicated, “the market was
for durable bulbs, not flowers”; besides the rare Semper Augustus bulb (i.e. peaked at 6,290 guilder
right before the crash) common tulip bulbs were sold at much lower prices and some bulbs had no
value, and according to Garber, this was understandable and explainable on the basis of market
fundamentals (i.e. demand and supply of rare varieties); using Garber’s analogy, the cryptocurrency
market was for Bitcoin (i.e. the first successful entry to the market, and very rare), many common (i.e.
altcoins) cryptocurrencies were at much lower prices, plus many altcoins either had no value or
market fundamentals pushed them out of competition (i.e. they became obsolete and disappeared).

Garber (1989) said that rare10 tulip bulbs (also called piece goods) always had high prices as these
were traded by “members of the middle classes and capitalized workers”, but they got even higher at
the end of 1636 when a slew of non-professional buyers entered the market; Garber argues that this
along with the college11 future markets and a change in rules to include the trading of common bulbs
fueled speculation which only lasted a month before collapsing on February 5, 1637 (for the timing
of unfolding events, see Posthumus, 1926, 1929; Doorenbos, 1954; Flood & Garber, 1980). In the case
of Bitcoin, it had practically $0.00 value when it was launched on SourceForge (January 9, 2009) and
its mysterious creator Satoshi Nakamoto (2008) made the world’s first cryptocurrency transaction
three days later (January 12, 2009) by sending 10 bitcoins to a computer programmer Hal Finney (i.e.
Nakamoto is argued to have mined one million bitcoins before he disappeared from the public eye).
The price of bitcoin was stable until the end of 2010, hovered around $0.01; but the price skyrocketed
(i.e. $31 in June 2011) when the Electronic Frontier Foundation (EFF) along with WikiLeaks decided
to accept bitcoins in January and June 2011 respectively (Taskinsoy, 2018a; 2019k, l, m, p, q, r, s, t, u),
however bitcoin’s first bubble popped when the EFF stopped accepting bitcoins in June citing legal
and lack of regulation concerns; consequently bitcoin price plummeted from peak of $31 to low of $2
during June – December 2011. The period of 2012-16 was the age of expansion (see Figure 3).

10 The rare bulbs (piece goods) included; Semper Augustus, Admirael Liefkens, Admirael van der Eyck, and Gouda.
11 Traders met in groups at various places called “colleges”, these were like the roots of modern-day bourse/exchange.

9
Source: Statista, https://www.statista.com/statistics/
Figure 3: Bitcoin Statistics
10
Despite the bursting of Bitcoin’s first price bubble in 2011, the emergence of other cryptocurrencies
(i.e. altcoins) sprouted like wild mushrooms and the resultant increased amount of publicity12 (good
or bad) made Bitcoin become a household name by 2016. In the first six years after Bitcoin’s release,
the following events in addition to what has already been mentioned previously had contributed to
its survival and huge success as well as its extreme volatility; the Bitcoin Foundation was established
in September 2012; Bitcoin payment processor Coinbase reached the milestone of selling $1 million
worth of bitcoins in February 2013; by the mid-2013, processing delays caused by BitInstant and Mt.
Gox prompted OkCupid and Foodler to accept bitcoins for payment; with the fast spread of Bitcoin,
some countries (i.e. China) banned Bitcoin from trading or exchanges from operating (Table 4); by
end 2013, Bitstamp became the largest Bitcoin exchange in Europe (see Figure 4); in early February
2014, then the largest Japanese based Bitcoin exchange Mt. Gox filed for bankruptcy protection.

Table 4: Adoption Progress of Bitcoin Worldwide

Advocates Developing Fence-sitters Hostile Banned

United States Russia Germany Brazil Iceland

Switzerland Cyprus Austria Hungary China
Singapore Portugal Belgium Latvia Bangladesh
Canada Norway Greece Turkey Nigeria
Luxembourg Poland Lithuania Lebanon Bolivia
Australia Slovenia Mexico Thailand Venezuela
Japan Italy Colombia Uganda Ecuador
Denmark France Argentina
Netherlands Bulgaria Indonesia
Finland Ireland Malaysia
Sweden Laos Taiwan
Spain Vietnam New Zealand
United Kingdom Israel Papua New Genie
Ukraine South Africa Fiji
Estonia Czech Republic India
Kazakhstan Bhutan
South Korea Pakistan
Philippines Iran
Chile Zimbabwe
Croatia Kenya
Source of data: https://blogs.thomsonreuters.com/answerson/world-cryptocurrencies-country/
Notes: 1) advocates (governments take steps to legalize, promote, and drive a parity); 2) developing (progress has
been made, but still some barriers exist); 3) fence-sitters (the wait-and-see mode, no actions are taken either to ban
or regulate cryptocurrencies); 4) hostile (many measures are taken to curtail the popularity of cryptocurrencies,
but people are not banned from trading or exchanges from operating); and 5) banned (cryptocurrencies are
outlawed in these countries, people who get caught are subject to fines, sanctions, or prosecution).

12 In January 2012, Bitcoin was featured in the CBS legal drama “The Good Wife” in the third-season episode "Bitcoin for
Dummies". Also in 2014, a documentary film “The Rise and Rise of Bitcoin” was released.

11
 Source: Adapted from Bitcoinist; https://bitcoinist.com/turkey-cryptocurrency-europe-owners/
Figure 4: Cryptocurrency Owners (%)

Cryptocurrencies are not regulated in Turkey, therefore it is one of the fastest growing markets for
Bitcoin and other popularly traded cryptocurrencies; according to a survey (see Figure 4), out of 100
people surveyed, 18 of them said to own Bitcoin or other digital coins. The Turkish government along
with its Banking Regulation and Supervision Agency (abbreviated as BDDK in Turkish) however do
not recognize Bitcoin as well as altcoins as a legal tender similar to fiat currencies. Over the years,
Turkey’s position regarding Bitcoin has improved from “hostile” (i.e. Table 4) to “wait-and-see mode”;
for this reason, the BDDK has not taken any action to ban or regulate Bitcoin. Nonetheless, the BDDK
has issued press releases on the topic to warn the public on potential risks involving Bitcoin plus over
4,000 altcoins. The law on Payment and Securities Reconciliation Systems, Payment Services, and
Electronic Money Institutions13 provides legal information concerning matters related to how
cryptocurrencies are used, surveilled, and supervised (e.g. LLC, 2018). Geopolitical tensions coupled
with unfavorable macroeconomic environment put Turkey among the top ten countries14 with most
Bitcoin holders. In fact, following the speculative attacks on Turkish lira and the ensuing currency
crisis in August 2018, Turks now own twice more bitcoins than the European overall average of 9%
(i.e. about one in five people in Turkey own Bitcoin or other cryptocurrencies).

13 Ödeme ve Menkul Kıymet Mutabakat Sistemleri, Ödeme Hizmetleri ve Elektronik Para Kuruluşları Hakkında Kanun
[Law on Payment and Securities Reconciliation Systems, Payment Services, and Electronic Money Institutions] (June 20,
2013), No. 6493, 28690 RESMÎ GAZETE [OFFICIAL GAZETTE] (June 27, 2013),
http://www.resmigazete.gov.tr/eskiler/2013/06/20130627-14.htm (Turkey).
14 The United States (also has 25% of the total number of active nodes), Romania, the Czech Republic, China, Spain, Poland,

Turkey, Japan, Switzerland, and South Korea. https://usethebitcoin.com/10-countries-with-the-most-bitcoin-hodlers/

12
Neither the tulipmania nor the Bitcoin mania was a real mania, but the similarities between the two
events are just strikingly astounding; but what separated Bitcoin mania from tulipmania was that the
tulip speculation (craze, fever, or delusion of crowds) disappeared after the crash in February 1637
while Bitcoin is still going very strong despite more than a dozen of sizable price corrections. Although
Bitcoin passed the $1,000 mark for the first time on 28 November 2013, it achieved the biggest critical
milestones during 2017; for example, on 10 December 201715, Bitcoin futures opened for trading on
the Cboe Futures Exchange (CFE), and a week later on the Chicago Mercantile Exchange (CME). Just
like in tulipmania (January - February 1637), inauguration of futures trading in The U.S., innumerable
non-professional traders entering cryptocurrency markets globally (increasing delusion or illusion of
crowds), and overly exaggerated Bitcoin publicity in all media channels available to consumers made
the price of bitcoin skyrocket in just days (peaked at intraday high of $20,089 on December 17, 2017)
before crashing in January 2018 (i.e. by March 2018, bitcoin price plunged below $6,000).

Garber (1989) explains with historical references why he believes the tulipmania was nothing more
than an isolated speculation that did not result in economic distress in Netherlands. If it were in fact
a true mania, economists in that period would have studied its implications on the broader economy;
on the contrary, Netherlands’ economic performance in the aftermath of the tulip collapse takes very
little notice of its impact (if any). Garber argues that “...the longer-term price rise occurred only in the
rare bulbs, no significant agricultural resources were devoted to expand their cultivation”. Garber
admits that the increasing speculation in rare bulbs included the common bulbs only by the end of
1636, but the extraordinary rises in these prices had trivial effect on resource allocation because the
common tulip bulbs were already harvested and were in the ground in September 1636 before surge
in prices of the common bulbs. Garber cited the following studies to prove his point; Rich & Wilson
(1975) did not mention tulipmania in the 17th century Dutch economic history, which was described
as a century of economic growth and financial resilience; Cooper (1759) bothers to mention the event
only in one sentence while Schama (1987) only interprets what was previously written before.

Another great resemblance between the Dutch tulipmania of the 17th century and the Bitcoin mania
of the 21st century is their inconsequential impact on the broader economy. Although the levels of
speculation were significantly more severe in Bitcoin than tulipmania, but their sudden collapse and
the duration it took were almost identical, i.e. extraordinary price rises in each event occurred in the
last month of the year (December 1636 and 2017 respectively) and were followed by unprecedented
price falls in just several days (Taskinsoy, 2018a). In a matter of several days in December 2017, the

15 Of course two decisions in 2016 paved the road for 2017; in March 2016, Japan recognized cryptocurrencies as having a
function similar to real (fiat) money, and in early 2017, Russia announced its plans to legalize the use of cryptocurrencies
such as bitcoin. In some exchanges, trade volumes had increased more than 1,000%.

13
price of bitcoin doubled from $10,000 to intraday high of $20,089 on December 17, 2017; at its peak,
the aggregate cryptocurrency market cap stood at massive $830 billion ($321 billion of that belonged
to Bitcoin alone). By the onset of January with the arrival of the New Year (2020), Bitcoin underwent
the biggest price correction since its inception in January 2009 that triggered a massive sell-off in all
cryptocurrencies. In one year (December 2017-2018), over $700 billion of wealth evaporated, $250
billion of which belonged to Bitcoin investors; interestingly, global investors during the Asian crisis
of 1997-98 lost $700 billion ($30 billion by Americans), and US President Clinton called described the
crisis as a “major glitch” (e.g. Nanto, 1998). As of 17 December 2019, after a recent price correction
again (i.e. the price of bitcoin was $13,017 on June 27, 2019), the combined cryptocurrency market
cap is $179 billion and Bitcoin’s market cap is $121 billion (67.6% of the market share).

Source: World Bank

Figure 4: United States GDP (2017)

As it was observed during the 17th century Dutch tulipmania, massive losses arose from the Bitcoin
crash (December 2017 – January 2018) did not have noticeable impact on the broader US economy
in 2018; conversely, the U.S. GDP expanded in 2018 (2.9%) compared with that of 2017 (2.4%).

3.0 Conclusion

Bitcoin mania (fever) of the 21st century in many aspects formed and collapsed similar to the Dutch
tulipmania of the 17th century. While bubbles can be identified in advance or not is hotly debated in
the literature since the late 1990s, there is a consensus among mainstream economists that economic
and financial bubbles are not beneficial; as observed repeatedly during the Asian crisis of 1997-98,
the dot.com crisis of 2001-02, and the global financial crisis of 2008; the bursting of the bubble and

14
the ensuing crash (i.e. possibly a recession, crisis, or depression in the aftermath) devastated the U.S.
economy and the world. Because the recurrence of the high-magnitude boom-bust cycles in the new
millennium, investors worldwide have lost over $30 trillion, and as a result of this mindboggling
impact, about 1% of the world population (as many as 70 million people) was pushed into poverty.

As Garber (1989) explained in detail with historical references that the tulipmania hardly had any
direct impact on Netherlands’ economy in the 17th century, we believe that both tulip and Bitcoin
manias had indirect impact on investing and spending behaviors (habits) because people (investors)
during periods of bubbles are ushered spending more and taking greater risks (in economics, this is
explained by “the wealth effect”). The contemporaneous crises since the late 1990s are a constant
reminder of this effect; during the property and housing booms in East Asia & Pacific and many
advanced nations including the United States, those people who felt richer on paper tended to spend
more (they went into unstoppable spending extravaganza); but when the music stops (i.e. bursting of
the bubble), same spenders in boom come to full stop in spending (i.e. severe contraction), hindering
economic growth which may lead to a recession, crisis, or depression.

This paper investigated the nature of the markets during both the tulipmania and Bitcoin mania; for
the former event, our conclusion is consistent with Garber (1989) study that there was no sufficient
evidence to suggest that the tulip bulb speculation during 1634-37 was a mania (or madness). We
agree with Garber that a brief bubble was created in the end of 1636 underpinned by increased level
of speculation with the common tulip bulbs entering the market in November 1636. We also drive to
the same conclusion in the case of Bitcoin mania which occurred almost identical as the tulipmania
(i.e. influx of altcoins into the market instigated further speculation which resulted in extraordinary
rises in prices of Bitcoin and other cryptocurrencies). But almost four centuries later, the tulipmania
was resurrected as Bitcoin mania in the 21st century; only time will witness if Bitcoin will continue
its dominance or disappear like the highly fashionable rare tulip bulbs of the 17th century.

15
References

Abreu, D. & Brunnermeier, M. K. (2003). Bubbles and Crashes. Econometrica, 71(1), 173–204.
Acheson, G. G, Hickson, C. R., Turner, J. D. & Ye, Q. (2009). Rule Britannia! British Stock Market Returns,
1825–1870. J. Economic History, vol. 69, no. 4, December, pp. 1107–1137.
Allen, F. & Gale, D. (1998). Optimal Financial Crises. Journal of Finance, 53(4), 1245–1284.
Allen, F. & Gale, D. (2000). Bubbles and Crises. The Economic Journal, 110(460), 236–255.
Allen, F. & Gale, D. (2007). Understanding Financial Crises. Clarendon Lectures in Finance. Oxford
University Press.
Azariadis, C. & Guesnerie, R. (1986). Sunspots and Cycles. Rev. Econ. Studies 53 (October): 725-37.
Baek, C., & Elbeck, M. (2015). Bitcoins as an Investment or Speculative Vehicle? A First Look. Applied
Economics Letters, vol. 22, no. 1, pp. 30–34.
Bartos, J. (2015). Does Bitcoin Follow the Hypothesis of Efficient Market? International Journal of
Economic Sciences 4: 10-23.
Blanchard, O. J. & Watson, M. W. (1982). Bubbles, Rational Expectations and Financial Markets. In
Crises in the Economic and Financial Structure: Bubbles, Bursts, and Shocks, ed. by P. Wachtel.
D.C. Heath & Company.
Blundell-Wignall, A. (2014). The Bitcoin Question: Currency versus Trust-Less Transfer Technology.
OECD Working Papers on Finance, Insurance and Private Pensions, (37), 1.
Bouoiyour, J., & Selmi, R. (2016). Bitcoin: A Beginning of a New Phase? Economics Bulletin, 36, 1430–
40.
Brunnermeier, M. K. (2001). Asset Pricing Under Asymmetric Information: Bubbles, Crashes.
Technical Analysis, and Herding. Oxford University Press.
Brunnermeier, M. K. (2008). Bubbles. In Palgrave Macmillan, eds. The New Palgrave Dictionary of
Economics. Palgrave Macmillan, London.
Bryer, R. A. (1991). Accounting for the ’Railway Mania’ of 1845: A Great Railway Swindle? Accounting,
Organizations and Society, vol. 16, no. 5/6, pp. 439–486.
Calvo, G. & Mendoza, E. (1997). Rational Herd Behavior and the Globalization of Securities Markets.
Mimeo, University of Maryland.
Caamerer, C. (1987). Bubbles and Fads in Asset Prices: A Review of Theory and Evidence. Manuscript.
Philadelphia: University of Pennsylvania, Wharton School, April.
Cermak, V. (2017). Can Bitcoin Become a Viable Alternative to Fiat Currencies? An Empirical Analysis
of Bitcoin’s Volatility Based on a GARCH Model. SSRN Electronic Journal.
Ciaian, P., Rajcaniova, M. & Kancs, D. (2016). The Digital Agenda of Virtual Currencies: Can Bitcoin
Become A Global Currency? Information Systems and e-Business Management, Springer, vol.
14(4), pp. 883-919, November.
Chiu, J. & Koeppl, T. (2017). The Economics of Cryptocurrencies—Bitcoin and Beyond. Queen’s
Economics Department Working Paper 1389.
Cooper, J. P. (1759). New Cambridge Modern History. Vol. 4. The Decline of Spain and the Thirty Years
War, 1609-48159. Cambridge: Cambridge Univ. Press, 1970. d'Ardene, Jean-Paul. Traite des
tulipes. Avignon: Chambeati.

16
Dash, M. (1999). Tulipomania. Random House: New York.
David, Y. (2014). Is Bitcoin a Real Currency? An Economic Appraisal. New York University Stern
School of Business and National Bureau of Economic Research.
Doorenbos, J. (1954). Notes on the History of' Bulb Breeding in the Netherlands. Euphytica 3
(February 1954): 1 -11.
Dreman, D. N. (1977). Psychology and the Stock Market. Investment Strategy beyond Random Walk.
New York: AMACOM.
Dyos, H. J. & Aldcroft, D. H. (1969). British Transport. Leicester University Press.
Ellis, H. (1954). British Railway History: An Outline from the Accession of William IV to the
Nationalization of Railways, 2 vols., George Allen and Unwin.
Evans, G. (1991). Pitfalls in Testing for Explosive Bubbles in Asset Prices. American Economic Review,
81(4), 922-30.
Flood, R. P. & Garber, P. M. (1980). Market Fundamentals versus Price-Level Bubbles: The First Tests.
J.P.E. 88 (August 1980): 745-70.
Garber, P. M. (1989). Tulipmania. The Journal of Political Economy, Vol. 97, No. 3 (Jun., 1989), pp. 535-
560. The University of Chicago Press, http://www.jstor.org/stable/1830454.
Garber, P. M. (1990). Famous First Bubbles. Journal of Economic Perspectives 4(2): 35-54.
Garber, P. M. (2000). Famous First Bubbles: The Fundamentals of Early Manias, Cambridge: MIT
Press, ISBN 0-262-07204-1.
Gayer, A. D., Rostow, W.W. & Schwartz, A.J. (1953). The Growth and Fluctuations of the British
Economy, 1790–1850: An Historical, Statistical, and Theoretical Study of Britain’s Economic
Development, 2 vols., Oxford Univ. Press.
Glynn, J. J. (1994). The Development of British Railway Accounting: 1800–1911. pp. 327–342 in R. H.
Parker and B. S. Yamey, eds., Accounting History: Some British Contributions, Oxford Univ.
Press.
Harding, W. (1848). Facts Bearing on the Progress of the Railway System. J. Statistical Society of
London, vol. 11, no. 4, Nov., pp. 322–343.
Kindleberger, C. P. [1978, 1989, 1996). Manias, Panics, and Crashes: A History of Financial Crisis. New
York: John Wiley and Sons.
Kindleberger, C. P. & Aliber, R. (2005). Manias, Panics, and Crashes: A History of Financial Crises (5th
ed.), Hoboken: Wiley, ISBN 0-471-46714-6.
King, R. R., Smith, V. L., Williams, A. W. & van Boening, M. V. (1993). The Robustness of Bubbles and
Crashes in Experimental Stock Markets. In Day, R. H.; Chen, P. (eds.). Nonlinear Dynamics and
Evolutionary Economics. New York: Oxford University Press. ISBN 978-0-19-507859-6.
Kristoufek, L. (2015). What Are the Main Drivers of the Bitcoin Price? Evidence from Wavelet
Coherence Analysis. PLOS ONE, 10(4).
Lambertini, L., Mendicino, C. & Punzi, M. (2010). Expectation-Driven Cycles in the Housing Market.
Center for Fiscal Policies Working Paper, no 01.
LLC (The Law Library of Congress) (2018). Regulation of Bitcoin in Selected Jurisdictions. The Law
Library of Congress, Global Legal Research Center, law@loc.gov, http://www.law.gov.

17
Mackay, C. (1841). Memoirs of Popular Delusions and the Crowd Psychology, Economic Bubbles,
History. Richard Bentley, London.
Mackay, C. (1852). Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. 2d ed. 2
vols. London: Office Nat. Illustrated Library.
Malkiel, B. G. (2007). A Random Walk Down Wall Street (9th ed.), New York: W. W. Norton, ISBN 0-
393-06245-7.
Menschel, R. (2002). Markets, Mobs & Mayhem. John Wiley & Sons: Hoboken, NJ.
Minsky, H. (1992). The Financial Instability Hypothesis. The Jerome Levy Economics Institute of Bard
College; Working Paper No. 74 (May).
Mitchell, B. R. (1975). European Historical Statistics 1750-1970. London University Press, 581-584.
Nanto, D. K. (1998). The 1997-98 Asian Financial Crisis. CRS Report for Congress, February 6.
Phillips, R. C, & Gorse, D. (2017). Predicting Cryptocurrency Price Bubbles Using Social Media Data
and Epidemic Modelling. IEEE Symposium Series on Computational Intelligence.
Posthumus, N. W. (1926). Die Speculatie in Tulpen in de Jaren 1636 en 1637. Parts 1-3. Economisch-
historiscjha arboek 12 (1926): 3-19; 13 (1927): 1-85; 18 (1934): 229-40.
Posthumus, N. W. (1929). The Tulip Mania in Holland in the Years 1636 and 1637. J. Econ. and Bus.
Hist. 1 (May 1929): 434-55.
Reinhart, C. M. & Rogoff, K. S. (2009). Banking crises: An equal opportunity menace. NBER Working
Paper No. 14587.
Rich, E. E. & Wilson, C. H. (1975). The Cambridge Economic History of Europe. Vol. 4. The Economy of
Expanding Europe in the Sixteenth and Seventeenth Centuries. Vol. 5. The Economic
Organization of Early Modern Europe. Cambridge: Cambridge Univ. Press, 1975, 1977.
Samuelson, P. A (1957). Intertemporal Price Equilibrium: A Prologue to the Theory of Speculation.
Weltwirtschaftliches Archiv 79, no. 2 (1957): 181- 219.
Schama, S. (1987). The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden
Age. New York: Knopf, 1987.
Shell, K. & Stiglitz, J. E. (1967). The Allocation of Investment in a Dynamic Economy. Q.J.E. 81
(November 1967): 592-609.
Shiller, R. J. (1987). Fashions, Fads and Bubbles in Financial Markets. In Knights, Raiders and Targets:
The Impact of Hostile Takeover, edited by Jack Coffee. Oxford: Oxford Univ. Press.
Shiller, R. J. (2005). Irrational Exuberance (2nd ed.). Princeton: Princeton University Press, ISBN 0-
691-12335-7.
Shiller, R. J. & Pound, J. (1986). Survey Evidence on Diffusion of Interest among Institutional Investors.
Discussion Paper no. 794. New Haven, Conn.: Yale Univ., Cowles Found., May.
Smith, A. (1848). The Bubble of the Age; Or, the Fallacies of Railway Investment, Railway Accounts,
and Railway Dividends, 3 editions, Sherwood, Gilbert, and Piper.
Taskinsoy, J. (2007). World Waters, Effects of Global Warming on Water. Istanbul Aydin University,
ABMYO Journal 2 (8), pp. 107-120, October (ISSN 1306-3375).
Taskinsoy, J. (2008a). Productivity. Istanbul Aydın University ABMYO Journal, Vol. 3(9), pp. 11-24,
January, ISSN 1306-3375.

18
Taskinsoy, J. (2008b). Water Management and Privatization. Istanbul Aydin University, ABMYO
Journal, 3 (10), pp. 19-34, April (ISSN 1306-3375).
Taskinsoy, J. (2008c). The Effects of Higher Education on Wages: Evidence from Turkey. Istanbul
Aydin University, ABMYO Journal, Vol. 3(12), pp. 91-107, October, ISSN 1306-3375.
Taskinsoy, J. (2012a). Relevancy of Corporate Financial Policies and the Profit Maximization View of
Islamic Banks. Journal of Social and Development Sciences, Vol. 3(6), pp. 184-193, June, ISSN
2221-1152.
Taskinsoy, J. (2012b). The Investment Rate of Return (IRR) to Tertiary Education in Turkey. Journal
of Education and Vocational Research, Vol. 3(5), pp. 154-164, May, ISSN 2221-2590.
Taskinsoy, J. (2012c). The Return of Investment on Tertiary Education in Malaysia. Journal of
Education and Vocational Research, Vol. 3(6), pp. 183-192, ISSN 2221-2590.
Taskinsoy, J. (2013a). Rigorous Capital Requirements under Basel III: Possible impact on Turkey’s
financial sector. Journal of WEI Business and Economics, Vol. 2(1), pp. 1-30, April.
Taskinsoy, J. (2013b). Basel III: Road to Resilient Banking, Impact on Turkey's Financial Sector. LAP
LAMBERT Academic Publishing, 237 pages, ISBN 13: 978-3-659-30696-9.
Taskinsoy, J. (2013c). Economic & Ecological Implications of Hydraulic Fracturing. West East Journal
of Social Sciences, Vol. 2(1), pp. 11-39, April.
Taskinsoy, J. (2018a). Bitcoin Mania: An End to the US Dollar’s Hegemony or another
Cryptocurrency Experiment Destined to Fail? (December 1, 2018). Available at SSRN:
https://ssrn.com/abstract=3311989 or http://dx.doi.org/10.2139/ssrn.3311989.
Taskinsoy, J. (2018b). Effects of Basel III Higher Capital and Liquidity Requirements on Banking
Sectors across the Main South East Asian Nations. International Journal of Scientific &
Engineering Research (IJSER), Vol. 9(4), pp. 214-37, April, ISSN 2229-5518.
Taskinsoy, J. (2018c). The Cost Impact of Basel III across ASEAN-5: Macro Stress Testing of Malaysia’s
Banking Sector. LAP LAMBERT Academic Publishing, 369 pages, ISBN-13 978-613-9-90012-1.
Taskinsoy, J. (2018d). A Macro Stress Testing Framework for Assessing Financial Stability: Evidence
from Malaysia. Journal of Accounting, Finance and Auditing Studies (JAFAS), Vol. 4(3), July, ISSN
2149-0996
Taskinsoy, J. (2019a). Ever More Financial Instability notwithstanding the Basel Standards and the
IMF’s Financial Sector Assessment Program (February 4, 2019). Available at SSRN:
https://ssrn.com/abstract=3328473 or http://dx.doi.org/10.2139/ssrn.3328473.
Taskinsoy, J. (2019b). Turkish Lira – A Fiat Currency that Resembles the Volatility of
Cryptocurrencies: The Effects of Exchange Rate Volatility on Turkish Economy (February 15,
2019). Available at SSRN: https://ssrn.com/abstract=3335545 or
http://dx.doi.org/10.2139/ssrn.3335545.
Taskinsoy, J. (2019c). The Transition from Barter Trade to Impediments of the Dollar System: One
Nation, One Currency, One Monopoly (March 6, 2019). Available at SSRN:
https://ssrn.com/abstract=3348119 or http://dx.doi.org/10.2139/ssrn.3348119
Taskinsoy, J. (2019d). Stress Testing Made Easy: No More US Banks Stumbling and Facing Public
Embarrassment Due to the Federal Reserve’s Qualitative Objection (March 17, 2019). Available
at SSRN: https://ssrn.com/abstract=3354018 or http://dx.doi.org/10.2139/ssrn.3354018.

19
Taskinsoy, J. (2019e). Typology of Stress Testing: Microprudential vs. Macroprudential Stress Testing
of Risk Exposures (March 28, 2019). Available at SSRN: https://ssrn.com/abstract=3361528 or
http://dx.doi.org/10.2139/ssrn.3361528.
Taskinsoy, J. (2019f). Pure Gold for Economic Freedom: A Supranational Medium of Exchange to
End American Monetary Hegemony as the World’s Main Reserve Currency (April 25, 2019).
Available at SSRN: https://ssrn.com/abstract=3377904 or
http://dx.doi.org/10.2139/ssrn.3377904.
Taskinsoy, J. (2019g). Asian Miracle, Asian Tiger, or Asian Myth? Financial Sector and Risk
Assessment through FSAP Experience: Enhancing Bank Supervision in Thailand (May 9,
2019). Available at SSRN: https://ssrn.com/abstract=3385337 or
http://dx.doi.org/10.2139/ssrn.3385337.
Taskinsoy, J. (2019h). Higher Capital and Liquidity Regulations of Basel Standards Have Made Banks
and Banking Systems Become More Prone to Financial and Economic Crises (June 9, 2019).
Available at SSRN: https://ssrn.com/abstract=3401378 or
http://dx.doi.org/10.2139/ssrn.3401378.
Taskinsoy, J. (2019i). A Delicate Moment in Turkey’s Economic Transition: Can Turkey Survive
Mounting Economic Problems without the IMF’s Bailout Package? (June 22, 2019). Available at
SSRN: https://ssrn.com/abstract=3408520 or http://dx.doi.org/10.2139/ssrn.3408520.
Taskinsoy, J. (2019j). We Need No Dime from the IMF: Is This a Temporary Illusion or Can the
Turkish Economy Recover from the Current Recession without the IMF Loans? (July 9, 2019).
Available at SSRN: https://ssrn.com/abstract=3417431 or
http://dx.doi.org/10.2139/ssrn.3417431.
Taskinsoy, J. (2019k). Facebook’s Project Libra: Will Libra Sputter Out or Spur Central Banks to
Introduce Their Own Unique Cryptocurrency Projects? (July 20, 2019). Available at SSRN:
https://ssrn.com/abstract=3423453 or http://dx.doi.org/10.2139/ssrn.3423453.
Taskinsoy, J. (2019l). Is Facebook’s Libra Project Already a Miscarriage? (August 15, 2019). Available
at SSRN: https://ssrn.com/abstract=3437857 or http://dx.doi.org/10.2139/ssrn.3437857.
Taskinsoy, J. (2019m). Facebook’s Libra: Big Bang or Big Crunch? A Technical Perspective and
Challenges for Cryptocurrencies (August 29, 2019). Available at SSRN:
https://ssrn.com/abstract=3445150 or http://dx.doi.org/10.2139/ssrn.3445150.
Taskinsoy, J. (2019n). Turkey’s Unravelling Economy Resembles the Ottoman Empire’s Financial
Collapse (September 29, 2019). Available at SSRN: https://ssrn.com/abstract=3461216 or
http://dx.doi.org/10.2139/ssrn.
Taskinsoy, J. (2019o). A Hiccup in Turkey’s Prolonged Credit Fueled Economic Transition: A
Comparative Analysis of Before and After the August Rout. Journal of Accounting, Finance and
Auditing Studies (JAFAS), Vol. 5(4), October, ISSN 2149-0996. Doi: 10.32602/jafas.2019.37.
Taskinsoy, J. (2019p). This Time Is Different: Facebook’s Libra Can Improve Both Financial Inclusion
and Global Financial Stability as a Viable Alternative Currency to the U.S. Dollar. Journal of
Accounting, Finance and Auditing Studies (JAFAS), Vol. 5(4), October, ISSN 2149-0996. Doi:
10.32602/jafas.2019.38.
Taskinsoy, J. (2019q). Blockchain: A Misunderstood Digital Revolution. Things You Need to Know
about Blockchain (October 8, 2019). Available at SSRN: https://ssrn.com/abstract=3466480
or http://dx.doi.org/10.2139/ssrn.3466480.

20
Taskinsoy, J. (2019r). Blockchain: Moving Beyond Bitcoin into a Digitalized World (October 17,
2019). Available at SSRN: https://ssrn.com/abstract=3471413 or
http://dx.doi.org/10.2139/ssrn.3471413.
Taskinsoy, J. (2019s). Blockchain: An Unorthodox Solution to Reduce Global Warming (October 24,
2019). Available at SSRN: https://ssrn.com/abstract=3475144 or
http://dx.doi.org/10.2139/ssrn.3475144.
Taskinsoy, J. (2019t). Bitcoin and Turkey: A Good Match or a Perfect Storm? (October 30, 2019).
Available at SSRN: https://ssrn.com/abstract=3477849.
Taskinsoy, J. (2019u). Facebook’s Libra: Why Does US Government Fear Price Stable
Cryptocurrency? (November 7, 2019). Available at SSRN: https://ssrn.com/abstract=3482441
or http://dx.doi.org/10.2139/ssrn.3482441.
Taskinsoy, J. (2019v). Global Cooling Through Blockchain to Avoid Catastrophic Climate Changes by
2050 (November 29, 2019). Available at SSRN: https://ssrn.com/abstract=3495674.
Taskinsoy, J. (2019w). The Global Competitiveness Index: A Comparative Analysis between Turkey
and G8 Nations (December 8, 2019). Available at SSRN: https://ssrn.com/abstract=3500542.
Wallace, B. (2011). The Rise and Fall of Bitcoin. Wired, November 23.
West, K. D. (1984). Speculative Bubbles and Stock Price Volatility. Financial Research Memorandum
no. 54. Princeton, N.J.: Princeton Univ., December.

21