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Learning & News => News related to Crypto => Topic started by: CebuBitcoin on September 16, 2018, 02:36:29 PM

Title: Irrational Exuberance Revisited: Is Crypto The New Dot-Com Bubble?
Post by: CebuBitcoin on September 16, 2018, 02:36:29 PM
If you have ever encountered the word ‘cryptocurrency’ or ‘bitcoin,’ there is a solid chance that within the same paragraph or even sentence the word ‘bubble’ could also be found. Bubble has indeed become a shibboleth for crypto sceptics, especially after the market soared at the end of 2017, and the widening gap between valuation and intrinsic value of digital currencies and tokens became ostensible to many.

Yet not all bubbles are created equal: some bubble-framed references and metaphors tend to surface more frequently in media space than others. Perhaps the crypto’s most conspicuous historical analogy is the dot-com bubble of the early 2000-s – and quite understandably so. There is almost irresistible temptation to draw parallels between the burst of the booming market that emerged around early applications of a disruptive communication technology, and the highly volatile market that emerged around the blockchain ecosystem.

The recent slump in crypto prices has only made face similarities more pronounced. As Bloomberg reported earlier this week, VanEck’s MVIS CryptoCompare Digital Assets 10 Index, which tracks the prices of top ten digital assets, went down 80 percent compared to its January high. Symbolically, this development is now more dramatic than the Nasdaq Composite Index’s 78 percent nosedive at the height of the dot-com crash. The overall market cap dipped below $200 billion, shrinking by a factor of more than three from the all-time high. Does this mean that crypto market is doomed to follow the pattern of the early internet boom’s infamous explosion?

Readmore: https://cointelegraph.com/news/irrational-exuberance-revisited-is-crypto-the-new-dot-com-bubble