That s the 800 billion dollar question. The children of the cryptocurrency bubble will be colossal.
In this article we will analyze bubbles throughout history draw parallels with the cryptocurrency market and reveal our buying strategy for cryptocurrencies.
Cryptocurrency bubble meaning. Dot com bubble vs. A january 2018 article by cbs cautioned about a cryptocurrency bubble and fraud citing the case of bitconnect a british company which received a cease and desist order from the texas state securities board. According to economists cryptocurrency is the mother of all bubbles.
The first is that new financial instruments are the authors of financial bubbles. Are we in a cryptocurrency bubble. By jose maria macedo.
Tulip mania crashed horribly taking a large. Companies add blockchain to their names and attract investment. Bitconnect had promised very high monthly returns but hadn t registered with state securities regulators or given their office address.
A few things needs to be made clear. Where this bubble goes is impossible to guess how high incalculable but the take away is. In the past we have seen bitcoin hit new all time highs followed by a frenzy of new investors buying their first cryptocurrency.
Many investors have noticed similarities between the current cryptocurrency landscape and the dot com bubble of 2000. How high cryptocurrency can sustainably go can be measured by at least how much fiat currency has to lose. In economics a bubble is when the cost of an asset is more than its intrinsic worth.
We must take this into account when judging what the market has largely decided is a hedge. Though the skyrocketing prices in the bygone years and many experts pinpointing cryptocurrency as a bubble it doesn t necessarily mean that it is. With cryptocurrency there is no logic or much in the way of history to cling to.
The fiat currency bubble is much much larger. The same is true today. A comparison with the 2000 dotcom bubble a satire of tulip mania by jan brueghel the younger 1640 legendary investors and nobel prize winning economists such as warren buffett ray dalio jamie dimon robert shiller and joseph stiglitz have all declared that cryptocurrencies are a bubble.
A comparison people will often make is comparing crypto to the dot com bubble which was the epic internet stocks bubble that took place from the mid 1990s to the early 2000s in the us. Is cryptocurrency a bubble. Back in 1998 2000 internet companies became wildly overvalued on the stock exchange.
Usually prices are gone up in a bubble when people show an extremely.