There is a similarity between the internet bubble and crash and the Bitcoin bubble today.
At the time, I saw two possible scenarios. Both are still viable today, but the degree of the 60 percent crash in Bitcoin tells me that we’re most likely experiencing scenario two, where the cryptocurrency hit its top near $20,000.
That doesn’t take scenario one out of the running. There’s still a remote chance that Bitcoin could surge back and break above $20,000, after which it would be curtains.
Neither scenario is good news for stocks.
Here are some updated charts:
Bitcoin Bubble vs. Internet Bubble, Scenario 1
The internet bubble saw a 46 percent crash in 1999 before rocketing to a new high in early 2000. The Bitcoin bubble has already seen a 60 percent crash, which makes a new high or scenario one less likely. But it is still possible if we can hold the recent 8,800 lows at 60 percent down from the top.
That said, this recent crash makes scenario two look more likely, especially if it goes down further.
Bitcoin Bubble vs. Internet Bubble, Scenario 2
That scenario would see a crash down to as low as $800 to $1,000 on Bitcoin, which would be down more than 95 percent from the top.
That would be a signal of bubble worry for the stock market. The coming weeks are critical.
Any new lows in Bitcoin would strengthen the likelihood of scenario two unfolding — that Bitcoin and cryptocurrencies peaked around $20,000 and the stock market will follow on about an eight- to nine-week lag.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
How To E-A-T Your Way to the Content Google Likes
Businesses looking to attract more web traffic will have to consider Google’s EAT guidelines. Learn about what Google EAT is...
Stablecoins: The New Kid On The Crypto Block
A new class of cryptocurrency that minimizes price volatility, stablecoins are attracting the attention of regulators globally. The problem? Lack...
Bill Authorizing Medical Cannabis Cultivation Advances in Brazilian Congress
The bill legalizing the cultivation of cannabis for medical and industrial purposes was approved by the Brazilian Chamber of Deputies....
Housell Maintains its Commitment to Digitization to take 5% of the Real Estate Market
The real estate company Housell argued that more and more people are daring to buy homes online. According to a...
Investing in Respiratory Therapies: Saving 30 Million Euros per Year
According to the consulting firm's report, the current annual increase in the number of patients requiring respiratory therapy is, on...
Crowdfunding7 days ago
A Crowdfunding Campaign for Proaco’s Opera Park was Launched on SimplEstate
Featured6 days ago
Barron’s Gold Mining Index 1920 to 2021
Business6 days ago
A 10% decline would not be a surprise although the tech-heavy NASDAQ could see a bigger drop
Featured6 days ago
Expensya Received 20 Million in its Latest Financing Round