Bubble! Bubble! Bubble!
Bubble! Screamed the Financial Advisor!
Crypto is a Bubble! Everyone knows that, say the masses!
Well, guess what, there's a huge bubble getting ready to burst all over their faces, and it isn't the grand new shiny bubble of Crypto.
No!
It's the sludge bubble that is the Stock Market. Investors are starting to fear these movements, and you can already see big financial institutions quivering with fear... not on their own wallets but for having the work they had back in 2009 to convince states to give them the people's money to bail them out.
Throughout this post we will look at the CAPE Index and on how it predicts a bubble bursting in no time.
We'll also go over what will happen and the effects it will have on Crypto.
If that's something you're interested in, read below.
The Stock Market Skyrocket: Over the Moon
So, is Wall Street getting pumped up to oblivion again?
This is the question that every stock broker asks himself every once in a while… but the answers have a cost, and that cost is too high.
In the last couple of months, people have began to worry, because since last year the growth is gigantic.
Not only that, but the fact that the world is getting better from 2009’s crisis is getting everyone’s hopes up and they have been pouring all of those hopes in the market.
Dow Jones went up 25% in the last year, and stock markets throughout the world have followed.
Here in Portugal, where I’m located, the PSI20 index has gone up 20% in the last 12 months, so you can see the trend is close to global.
One of the most useful tools we have to predict bubbles is the CAPE index.
Cape stands for Cyclically Adjusted Price-to-Earnings and was created by the Nobel Prize winner Robert Shiller.
Now, look at this graph and you can tell that the values have now entered “Danger Zone”.
Note that in Crypto Currency trading, graphs like this happen all the time… but not in the Stock Market.
- What does the graph tell us?
Well, the first High was the 1929 crisis, the second high was the 2000 dotcom bubble... and you can see what happens in a few.
How ironic, that the same people who call Crypto a bubble are living inside one and risk having all their possessions blown away by their “safer” approach to trading.
How Will the Bubble Bursting Affect the Crypto Market?
Now, this is what all people are asking themselves right now.
- How will the crash affect the Crypto Market.
Well, in the short term it will be bad, since companies will suffer a huge blow and therefore innovation will come to an halt in the first few moments.
But in the long term it will be GREAT!
It will be great by mainly two reasons:
- Moments of "After-Crisis" are shown to be the moments in which Innovation and Technology Adoption rise substantially.
- A Crash in the Stock Markets marks the inferiority of the current economic model and FIAT altogether.
So, if you fear for Crypto - don't!
Crypto is a paradigm shift, and this explosion will happen in the old paradigm, so it even plays nicely on our plans and expectations.
Again, how ironic that the "riskiest choice" happens to be the safer one.
In Conclusion
So, in conclusion - when this all happens you can finally stick it up everyone who has been telling you you're a fool for "gambling" in Crypto.
When this happens, you can rest assured your economies are safe, cryptoed in several different tokens that will only see raises as the economy recovers and people leave the old paradigm to adopt the new.
And you'll then be laughing while going to the bank, to cash in since you're tokens went to the moon and further.
Pass by the stock brokers' counter and drop them a business card saying:
Jason Oak
Crypto-Trader
Dial 1-800-FCKU!
How cool will that be?
Hehehe.
Cheers!
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