CRYPTO IS THE NEXT BUBBLE AND EVERYONE KNOWS IT
During the dot-com boom, it was possible for a promising dot-com company to become a public company via an IPO and raise a substantial amount of money even though it had never made a profit. Or in some cases, realized any material revenue whatsoever. Pretty similar to an ICO right?
The dotcom bubble
- Boom of Internet and computer usages
- Started in 1990 accelerated in 1997 and ended in 2001
- High speculation period - anything .com could raise dozen of millions $
- Many investors were eager to invest @ any valuation & very poor due diligence
- Total market capitalisation reach over 6 trilions at its peak
- FOMO lead to be less cautious on investments end up giving capital to quickly
- Investors figured out around March 2000 that most of the startups were way overvalued
- Most of the .com companies failed
- In a few months in 2000 the overall market cap fell around 80% of its value.
- Ex: Amazon stock price fell from $107 to lower than $10 (Now 1187 though)
How it was back then
"BUBBLE":
Rush of investment from investors leading to invest in overvalued projects and lose their money after realizing that they paid a stock price 10X its "real price "
Crypto is a Bubble waiting for a correction
I don't like to say that crypto is a Bubble. Blockchain decentralization and smart contracts are together game-changing techs that create new business models, leading to real disruptions. It's an awesome time.
My Guess
My opinion is that the total market cap (now 0.62 Trillion) is going to exceed the one from the dotcom bubble (3 Trillion)
- There are more investors than 17 years ago.
- During the dot-com boom, Internet wasn't the same than today and computer power neither
- Today it is easier to invest.
- Anyone from anywhere can invest any amount under 1 minute from their laptop.
- We have way more
investorspeople investing and they are less experimented in investment & trading - Overvalued project are even more overvalued because masses are less experimented
CONCLUSION
The rhythm of growth, ease to invest, and hype around crypto are the reasons why I think, the total crypto market cap is going to grow much faster and higher than the dot-com projects. It will also correct much faster as well.
My strategy as an investor investing in crypto remains short-term (<1-2 years ) whereas investing in startups outside cryptos is usually a 5-8 years strategy. Most of the crypto projects being way overvalued, the main thing to keep in mind is that getting burst from a crypto bubble is very likely to happen, but also that Google, Facebook, Amazon, Ebay, Yahoo, etc.. came right after the dot-com crash.