Cryptocurrency valuations are frequently dismissed as being in a bubble that will soon pop. Investors are recalling the dotcom boom of the late 90s and early 00s when they say that wrote Eric Jackson. Looking more deeply into that bubble can prove instructive:
- During the dotcom bubble people were quitting their day jobs to become traders and taxi drivers would discuss stock tips. There’s nowhere near this level of mania in the cryptomarket suggesting it could have a long way to go.
- The companies that emerged the dotcom bubble? Amazon. Microsoft. Google. Even if the crypto buble pops, today’s investors will likely still hold stakes in tomorrow’s crypto giants.
- Amazon’s example could be instructive. It went from $76 a share to $6 a share when the dotcom bubble popped. Today it trades at $1,000 a share.