Everyone knows about the Tulip Bubble, first documented by Charles Mackay in 1841 in his book Extraordinary Popular Delusions and the Madness of Crowds.
Thanks to Mackay’s vivid account, tulips are a well-known cautionary tale, applied to asset bubbles of all types; here’s the problem, though: there’s a decent chance Mackay’s account is completely wrong.
Insightful writing as always by Thompson. The gist being: The nature of “the tulip bubble” is probably misunderstood. But even if it wasn’t, that doesn’t mean it’s a great comparison for what happening with Cryptocurrencies today.
Two further points which he doesn’t touch on:
- Tulips are still an item of value;
- The Netherlands still lead the world in them.