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If the Madcap Laughs: When they called the Bitcoin tulip bulb

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@koenau
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A field of tulips as beautiful as we love it.

She was the queen of flowers and worth more than gold and money. 360 years ago, tulips sparked a hysteria in Holland which should warn us before the current rise of the Bitcoin. If you read this - make you a little bit fun of all and try to think "Bitcoin" every time you read the word "tulip" ;-)

Yet it all started quite harmlessly. The tulip, originally from the distant Pamir Mountains, was first discovered by Turkish sultans as an ornamental plant. Later, she also made its way to Europe, where wealthy merchants took pleasure in breeding new varieties. The varieties became more and more colorful and noble, and traded among real enthusiasts.

A craze for all

There was no reason to get excited - had it not been for several influencing factors that turned the harmless hobby into the trigger for a craze that, at its peak, almost the entire Dutch population fell victim to.

Holland was a rich country in the 16th century. The lucrative Indian trade in particular had ensured that the young republic could develop explosively after the long war against Spain. Refugees from the areas still occupied by Spain caused the economy to boom, and a rich upper class earned more money than it could actually use. The middle class, too, did not lack resources, but rather the means to spend them. After all, Holland was a strict Puritan country with very strict customs: expensive clothes were frowned upon, wealth should not to be flaunted.

So the tulip was just the thing. Too expensive for everyone to have. And yet affordable enough to plant a few of them in one's own garden. Tulips like the legendary "Semper Augustus" were traded at horrendous prices because of their unearthly beauty. Prices that were gladly paid. The most precious species of tulips were the result of long selection breeding processes, their value derived from the desire of many people to own one of the few specimens too.

The magic of the florists

As the demand for bulbs grew while the supply could not keep up, it became obvious that there was money to be made in the tulip trade. Thus, in the early 1630s, a new profession was born: the "florists" had no interest in cultivation and growth, but only the intention to buy cheaply and sell more expensively. Money wasn't be earned more easily anywhere else: A hundred guilders became a thousand guilders almost overnight, a thousand became ten thousand.

An "Admiral de Man" tulip could be bought for 15 guilders and sold weeks later for 175, a "Gheel en Root" rose from 45 to 550 guilders. A "Gouda" increased in price by 50 percent between January and May 1636, and by 1637 her price had tripled once again. Everywhere there was only talk of tulips and how much could be earned with them and how quickly. More and more private individuals got involved: All you needed was some money and a garden to "park" your acquisition over the winter. With the start of the trading season, it was then possible to dig it out and cash in.

High, higher and deep down

Later, even a so-called futures market developed, as it is indispensable today at every stock exchange: Here, flowers were now also sold that were still in the ground, and shrewd traders even developed options and calls for flowers that yet wasn't seeded. No one bought tulip bulbs to plant tulips anymore. Everyone was solely eager to resell the flowers and onions at higher prices.

Finally, in February 1637, tulip prices had reached a dizzyingly high level. A mediocre tulip was now worth as much as eight pigs, four oxen, 24 tons of wheat, 48 tons of rye, two barrels of wine, 2,000 kilos of butter and 500 kilos of cheese.

The crash that had to come can now be dated to the first Tuesday in February 1637. In Haarlem, the Tulip Exchange was in session, and at the beginning, as usual, a merchant offered a certain variety at a fairly civil price to test the market situation.

Only this time no buyer was found. Even at lower prices, no one wanted to buy. NO ONE. Within a few minutes, it was clear to the assembled traders what this meant. The boom, thought to be endless, was over; without buyers, all the accumulated supplies were worth no more than a bunch of sacks of onions.

Collaps is coming

Now the madness was collapsing. There are not even records of tulip prices after Black Tuesday, because this craziest speculation in history disappeared like a ghost - leaving behind it only a tail of ruined speculators, indebted private individuals and a few profiteers.

All that remained was a painting by painter Pieter Nolpe: "Flora's Fool's Cap" it's called, or "when one fool hatched another and the wise lost their wits."

Peter Nolpes picture

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