The Bubble Parallel
Amazing parallels! Examining side by side the Dot-com bubble and Crypto. I will be Analyzing the significance of the historic asset bubble and then compare, contrast, and identify parallels between Crypto & the Dot-Com.
What is the Dot-Com Bubble?
The Dot-Com bubble was a bull market run that pushed the Nasdaq from under 1,000 to more than 5,000 in 5 years. The most notable period was the exponential bull run between 1998-2000. It was an era of “new age economy” fueled by frenzied speculative hype. The price inevitably came to a drop in March, reaching a blow-off top phase with a market cap of 6.71 trillion. Could we be witnessing similar parallels with Crypto today? “Speculative bubbles are notoriously hard to recognize while happening, but seem obvious after they burst.”
Can Crypto Parallel a blow-off top?
Bitcoin and Crypto, in general, have been compared to the Dot-com bubble in the past (most notably 2017) however the market cap was only 758 Billion at the time. What is also interesting is ever since Crypto broke over 1+ trillion, we have reached two paradigms, which leads me to believe the real motive of the market structure is leading to a massive blow-off top. I also would argue that Crypto is still going through a potential 2-year exponential run starting in March 2021. This would mirror the extreme manic phase of the Dot-Com where the market cap hits the trillion+ dollar territory. Bitcoin in theory is designed to absorb inflation but timing the rotation of money can be difficult.
Will some alts die while BTC thrives?
Many altcoins and projects in the crypto space parallel with Dot-Coms wave of businesses with zero use cases and no actual profitable business model. Focused on growing very big very fast promotional spending increased going as far as spending hundreds of millions of dollars on parties. Boo.com (spent 188 million$) Pixelon (spent 60 million$) The past few years we saw meme coins exploding in value and many projects growing that hardly even retained a profitable business model. I would be wary with most of these projects in general as they are most definitely not long-term proven holds.
Key points
· Bitcoin did not reach a natural Blow-Off top
· Market Cap in comparison to previous bubbles is still small
· “Era of new age economy”
· Hype-fueled projects / coins that do not retain a profitable business model.
· Exorbitant amount of Fiat printing can lead to crypto absorption off rotating money
Conclusion
Bitcoin is likely to parallel a blow-off top and has a strong probability to break over 100k. However, timing the exact bottom of the market, in general, is a very difficult task. If we do enter a high cap Blow-Off top phase we can expect many alt coins, businesses, and projects to go bust after smart money exits. Good luck!
What is the Dot-Com Bubble?
The Dot-Com bubble was a bull market run that pushed the Nasdaq from under 1,000 to more than 5,000 in 5 years. The most notable period was the exponential bull run between 1998-2000. It was an era of “new age economy” fueled by frenzied speculative hype. The price inevitably came to a drop in March, reaching a blow-off top phase with a market cap of 6.71 trillion. Could we be witnessing similar parallels with Crypto today? “Speculative bubbles are notoriously hard to recognize while happening, but seem obvious after they burst.”
Can Crypto Parallel a blow-off top?
Bitcoin and Crypto, in general, have been compared to the Dot-com bubble in the past (most notably 2017) however the market cap was only 758 Billion at the time. What is also interesting is ever since Crypto broke over 1+ trillion, we have reached two paradigms, which leads me to believe the real motive of the market structure is leading to a massive blow-off top. I also would argue that Crypto is still going through a potential 2-year exponential run starting in March 2021. This would mirror the extreme manic phase of the Dot-Com where the market cap hits the trillion+ dollar territory. Bitcoin in theory is designed to absorb inflation but timing the rotation of money can be difficult.
Will some alts die while BTC thrives?
Many altcoins and projects in the crypto space parallel with Dot-Coms wave of businesses with zero use cases and no actual profitable business model. Focused on growing very big very fast promotional spending increased going as far as spending hundreds of millions of dollars on parties. Boo.com (spent 188 million$) Pixelon (spent 60 million$) The past few years we saw meme coins exploding in value and many projects growing that hardly even retained a profitable business model. I would be wary with most of these projects in general as they are most definitely not long-term proven holds.
Key points
· Bitcoin did not reach a natural Blow-Off top
· Market Cap in comparison to previous bubbles is still small
· “Era of new age economy”
· Hype-fueled projects / coins that do not retain a profitable business model.
· Exorbitant amount of Fiat printing can lead to crypto absorption off rotating money
Conclusion
Bitcoin is likely to parallel a blow-off top and has a strong probability to break over 100k. However, timing the exact bottom of the market, in general, is a very difficult task. If we do enter a high cap Blow-Off top phase we can expect many alt coins, businesses, and projects to go bust after smart money exits. Good luck!
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