Is the Dot-com Bubble vs Bitcoin Rally an Apples to Oranges Comparison?
FUD FUD everywhere! Everytime Bitcoin rallies, it brings a whole lot of FUDsters predicting all kinds of scary things. Truth is that we have absolutely no idea what is going to happen and predictions are well...predictions after all. They may or may not come true! We can only prepare for:
An upward swing which ensures profitability and longevity of our investments or
It all goes bust and we rely on our emergency funds that allows us to go on with our lives.
With any kind of investments, this is all that you can do...really!
In recent times, Bitcoin’s unprecedented rally has often been compared to the build-up that lead to the Dot-com crash in early 2000-2001. There were many companies whose stock prices shot up considerably. They got big really fast and then went bust owing to a number of reasons.
It took about 5 years or so for business that gained massive market share to lead up to the peak and crash. The rapid interest in internet companies ultimately led to an implosion and free fall in prices for over 2 years. It proved that IPOs and VC money couldn’t guarantee any couldn’t substitute for lack of solid business model and regular income flow in order to scale. At least that is my understanding of the era.
Chaos precedes all great changes. The dot-com bubble is what led to the modern internet as we know it. There were many companies that made it through these harsh times. Priceline, Amazon, Ebay, Microsoft, Apple, ARM, IBM, Coupons.com, SanDisk, and Oracle are some of the companies that have since become giants with market cap in the billions.
The entire dot-com market cap at the time of the crash was just upwards of $5 trillion. We’re just under $600 billion in crypto-market cap at press time. This isn’t a lot in comparison. It surely feels like it but fact is that $5-8 trillion doesn’t hold the same value today as it was 16-17 years ago. The IT space is far more valuable today than it was when it began.
There’s a lot of real development in the crypto-space from various companies and projects that are pioneering new opportunities to grow this domain and make it scale.
Therefore, I feel that we’re still too early to witness a massive crash in valuations of cryptocurrencies and comparing dot-com bubble to Bitcoin rally isn't fair. On the flipside however, many new entrants into the space are here purely for speculation, especially due to widespread FOMO in the market.
Whether these massive crypto valuations exist or don’t, I certainly feel that blockchain technology and blockchain based applications will thrive in the next few years. Some of our traditional software giants today are starting to adopt and experiment with blockchain technology.
The bottom line is that blockchain technology is still in it's early stages. Mass adoption is many years away and by the time we get to that point, there would've been a lot more development of these new and disruptive technologies.
For now, let's sit tight and enjoy the ride!
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It cannot be a bubble because nothing like Bitcoin has ever happened before in the history of mankind! What a time to be alive!
If you trust the platform and the technology behind it, then these FUD should not affect anymore...Diversifying would be best strategy to handle the uncertain market conditions.
Exact friend, and really its creators are investing in the security of their platform to create trust in their users., No creator would like your platform to be insecure. That world is on the rise and on its way to entering the international markets. That will be the future investments in the world. Regards!
The key is to diversify
I agree with you.
Upvoted. Right on man. Fud everywhere. That's why it's important to research research research to determine fud from actual news. Thanks for sharing.
Thanks for the great post. Steemit has enlighten me in many areas of my life. How I wish have join this blog since last year.
Early this year, some people started introducing people to invest in what they call T.B.C. ( The billion coins). Not knowing it was scam.
But ever since I join this site, have read a lot of posts that taught me about Btc, cryptocurrency and other coins, blockchain and blocktrades.
With my little knowledge, no one can predict what bitcoin will say tomorrow. Tomorrow shall tell. So invest with the money you can afford to lose.
I believe Bitcoin is not a bubble; It's in an S-Curve and It's Just Getting Started , Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
Great Blog, I also think it is just getting started, I kick myself now only because i have the opportunity to buy Bitcoin's back in 09-10, I just didn't do my homework and look into it more, now its just a story to tell, I told myself i will not miss this opportunity again, I have been on a Bitcoin binge to seek all the info i can to have a Nice portfolio by end on 2018.
I believe that the only way bitcoin would crash that hard would be if people started to go for more privacy oriented cryptocurrencies, like monero. to go for more privacy oriented cryptocurrencies, like monero.
Nobody knows the future of Bitcoin and other cryptocurrencies. Everyone is predicting their predictions. Technology is developing everyday. Crypto may do well in upcoming days.
Thanks for sharing such an informative article.
Thank you. Nice write-up, cryptohistry info: the level it is write now is the level of nurture.. diff cryto crashes and redeveloped, split etc. We hope for the best as we enjoy the present.
blockchain technology is still in it's early stages, even it is adapted by some banks like access, I don't think this is going to be like Dot-com Bubble
I do feel that there is a bubble building, but the window has been short. I think we'll see some rises, with some corrections, for a few years to come, but as global currency markets destabilizes, cryptocurrencies, which do not have the same vulnerability, will fill a larger share of the market.
This is a good analysis of the market value, and I agree. A true bust in the market is likely years off.