Bitcoin is no tulip, says ETF analyst Eric Balchunas

Bloomberg’s Eric Balchunas rebuts Bitcoin–tulip comparisons, citing 17 years of recoveries, ETF demand, and halving-driven scarcity as proof of lasting asset value.

Summary

• Eric Balchunas notes Bitcoin is still up roughly 250% in three years and 122% in 2024, despite a 27% pullback from October highs.​
• He argues non-productive assets like Bitcoin, gold, art, and rare stamps hold value via scarcity and demand, unlike tulips’ short-lived 1630s bubble.​
• Halving-driven supply cuts, ETF accumulation, and on-chain holding data suggest corrections are normal consolidation, not a systemic collapse.

Bloomberg ETF analyst Eric Balchunas has challenged comparisons between Bitcoin and the Dutch tulip mania of 1637, citing the cryptocurrency’s 17-year survival and multiple recoveries as evidence of its durability as an asset class.

In a December 6 social media post, Balchunas noted that Bitcoin remains up approximately 250% over three years and gained 122% in 2024, despite recent pullbacks of about 27% from its October high.

“Tulips rose and collapsed in a few years, punched once and knocked out. Bitcoin has come back from multiple massive shocks to reach new highs and has survived 17 years,” Balchunas wrote, according to his public statements.

The analyst, who tracks spot Bitcoin exchange-traded funds, pointed to the cryptocurrency’s resilience through major market events including exchange hacks, banking crises, the 2018 initial coin offering downturn, pandemic volatility, and high-profile project failures.

Bitcoin ETFs held significant assets under management as of early December, according to industry data, with institutional participation providing support during market downturns.

Balchunas argued that non-productive assets can retain value without generating income or dividends. “Bitcoin and tulips are both non-productive assets. But so is gold, so is a Picasso painting, rare stamps — would you compare those to tulips? Not all assets have to be productive to be valuable,” he stated.

The analyst noted that Bitcoin‘s recent decline represented a correction from elevated levels rather than a systemic collapse. “If you think about Bitcoin’s year, all that really happened up to that point is it gave up the extreme excess of the prior year,” Balchunas wrote in a follow-up post.

Gold‘s market capitalization does not produce yields, yet the precious metal maintains significant value based on scarcity and historical acceptance as a store of value, according to financial analysts. Bitcoin proponents argue the cryptocurrency serves a similar function with additional utility in remittances and corporate treasury applications.

The 2024 Bitcoin halving event reduced new issuance, tightening supply as ETF demand increased, according to blockchain data. On-chain metrics showed significant accumulation by larger holders during recent price declines, with a substantial portion of Bitcoin supply remaining unmoved for over 12 months.

Market valuation metrics such as the MVRV Z-Score indicated periods of undervaluation compared with historical bull market triggers, according to cryptocurrency analysts.

The Dutch tulip mania lasted approximately three years from 1634 to 1637, with prices collapsing after reaching peak levels. Bitcoin, launched in 2009, has experienced multiple boom-and-bust cycles while establishing new price highs following each downturn.

Balchunas concluded that market participants were “overanalyzing” short-term price movements, suggesting that asset consolidation periods are typical in long-term investment cycles.