This Stock Market Bubble Makes the Bitcoin Crash Look Like a Joke
Think bitcoin is a bubble? Have you even seen the stock market? | Source: Shutterstock
By CCN: Wall Street loves to compare bitcoin to tulip bulbs and beanie babies, but if the stock market isn’t trapped in a devastating bubble then nothing is.
It’s easy to trash crypto in the wake 2017 ICO frenzy. From peak to trough bitcoin lost around 85 percent of its value in 2018. And bitcoin is generally regarded as the safe haven play in the digital currency landscape. Many small-cap coins lost more than 95 percent of their value; others went bust.
That may, however, be a valuable lesson for anyone keeping a close eye on US equities. Stocks are forming an ominous parabolic curve all too familiar with those who’ve been in the markets for more than just a few years.
Are we in the midst of the next mania? It sure appears that way.
Dissecting a Stock Market Bubble
History is replete with examples of economic bubbles, going all the way back to Tulipmania in 17th-century Holland. A more relevant and recent example can be found in Amazon stock (NASDAQ: AMZN) during the dotcom bubble:
The classic bell curve in all its devastating glory. Amazon’s stock price took a 95 percent hit as the dust subsided in 2001. Where have we seen that kind of loss before? Oh yeah.
Now, ten years after the global financial crisis, Amazon stock once again looks uncomfortably parabolic: