How can rising bubbles shrink and disappear?

Here is an explanation by Bo Danforth:

Shown in the picture above is a segment of a Wurlitzer jukebox bubble tube. In the tube, the bubbles rise as expected, but as they approach the top, odd things begin to occur. Instead of remaining the same size as one might think, or increasing slightly from a minute reduction in pressure, they instead decrease in size, in some cases disappearing entirely. The reason for this bewildering sight is that the bubbles do not actually contain air, but are pockets of heated vapor. The bubble tube is a sealed system where the air has been completely removed by a pump, creating a partial vacuum, which causes the liquid to fill the remaining space with vapor. The system is at a pressure where it will change states near room temperature. When this sealed tube is placed next to a heat source at the bottom (the light bulb) the liquid near it reaches a boiling point, according to the equation of PV=NRT. As the bubbles of vapor float upwards along the exposed glass and away from the heat source, they slowly shrink as the gas cools down, condensing back into a liquid state.

Either this gas is dissolved, or it is a vapour of that liquid that condenses gradually.

The fluid in the tube is not water as some might think but an organic solvent called Dichloromethane. The reason the bubbles form is due to the fact that the fluid is heated at the base of the tube to it's boiling point which is a low 103.3 F degrees. You can almost get it boiling by holding it in your hand. The bubble is actually the vapor form of the liquid, as the liquid travels up the tube it cools and returns to the liquid state.