The Dot-com bubble started around 1997, peaked in 2000 and ultimately burst by 2002. As the name suggests the bubble revolded around speculative investments in internet companies. Simply put, investors were so excited about the progress of the internet that they invested in pretty much any tech company with a pulse. They stopped caring about whether or not a company was profitable or at least could eventually become profitable. Common sense became a rarity.
From 1997 to March 2000 prices went up about 5 times only to go down 5 times and return to their pre boom levels from 2000 to 2002. A drop which was also exacerbated by the terrorist attacks of 9/11 in 2001.
Only 1 out of 2 internet companies survived. A business such as pets.com went from a market capitalization of over $300 million to zero within a year.
Amazon.com
There are however also success stories such as Amazon.com. The value of Amazon went from over $100 per share during the bubble peak all the way down to $5.50 per share when the bubble bursted. A huge decline, but unlike many other stocks in those days Amazon.com climbed back in the years thereafter up to over $1000 US Dollar per share.
Are the cryptocurrency markets in a bubble?
Are the cryptocurrency markets currently in a bubble? I don't know. Only time will tell. It's hard to not think of a massive bubble when I see many cryptocurrencies increase in value by 300% or more in just a few weeks. Party like it's 1999! On the other hand, the surge of Bitcoin and Steem is based on real growth. Bitcoin adoption in Asia is huge and the user base of Steem is growing extremely fast.
Cryptocurrencies are new. Most of the world has still no idea what bitcoin is, let alone Ethereum and Steem and other currencies. The opportunities are endless.
However, I'm not surprised if there’s at least some type of correction. Many cryptocurrencies have skyrocketed over the last few weeks and when an asset rises that fast it’s a near certainty that it will come back down. This just gives you a nice opportunity to step in. If it happens, remember that even Amazon.com went from $100 to $5.50 per share, but is now being traded for nearly $1000 per share. If the crypto-world is currently in a Dot-com bubble 2.0, I expect Steem to come out of it as the Amazon.com.
Amazon had a long term vision, so if you are going to invest in cryptocurrencies, do it because you see the long-term vision. For this reason, I invest in Steem!
