Eerie similarities btw internet 2000 & crypto 2022--
1. Users base at ~ 6% global population
2. Both had multi-yr bull run, hyped (correctly) as breakthrough tech, yet still thinly supported by actual use cases
3. Monetary policy headwind (6x Fed rate hikes in 1 yr back then)
1. Users base at ~ 6% global population
2. Both had multi-yr bull run, hyped (correctly) as breakthrough tech, yet still thinly supported by actual use cases
3. Monetary policy headwind (6x Fed rate hikes in 1 yr back then)
In 2000 Nasdaq went on to drop 80% in 2 yrs, didn't recover to same level till 15 yrs later.
It was blessing in disguise for internet industry--weeded out opportunists, gave real builders breathing room to build & allowed organic growth.
But abs brutal for investors.
It was blessing in disguise for internet industry--weeded out opportunists, gave real builders breathing room to build & allowed organic growth.
But abs brutal for investors.
Obv history doesn't repeat blow by blow. But setup is so similar that I can't help but think a multi-year bear mkt for crypto may be in the cards.
Only missing ingredient is a blow-off top. If that happens in next few months, I think we'd almost surely see history rhymes.
Only missing ingredient is a blow-off top. If that happens in next few months, I think we'd almost surely see history rhymes.
Another similarity is mkt cap. In 2000 Bloomberg Internet Index reached peak mkt cap of $2.9 tn (abt $3.5 tn in today's $).
Given internet stocks back then cover wider subsectors than crypto today, a $2.5-3 tn mkt cap would put crypto at par w/ dot-com valuation then.
Given internet stocks back then cover wider subsectors than crypto today, a $2.5-3 tn mkt cap would put crypto at par w/ dot-com valuation then.
Want to reemphasize this is not a straight bear call. Reality is more complex & things won't happen exactly like before.
My point is if we go back to $2.5-3 tn mkt cap range in next few mos, then extended bear mkt like the one following dot-com would be likely.
My point is if we go back to $2.5-3 tn mkt cap range in next few mos, then extended bear mkt like the one following dot-com would be likely.
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