A few weeks ago on CNBC, an analyst compared the bitcoin bubble to the early internet bubble.
What?!
We’ve been saying that since late December 2017, when bitcoin was just starting to crash.
And oh, did it crash. It dropped 37% in just two weeks from December 16 through the 30th. After a brief bounce – there was another 63% drop on February 5, 2018. In less than two months, it was down 69% from the top…
I’ve never seen that before, but I know how quickly bubbles first burst when they finally do.
Seeing as it’s old news to us that the two big bubbles are similar, let’s recap what we see…
The Similarities to the Internet
I’ve warned about what happens when bubbles first burst and why to get out a bit early, rather than a bit late. They suck everyone in, then the smart money pulls the plug.
It was that way with the Internet. It was that way with bitcoin.
Bitcoin’s bubble was extreme. So, its first crash was equally dramatic.
My argument from the beginning was that bitcoin’s a major new trend. It’s like the internet 2.0.
Kevin Ashton (a keynote speaker at our Irrational Economic Summit) long ago coined the term “The Internet of Things.” How does the internet account for things of value and protect their security? That’s what it is failing at after exploding knowledge and communication for information.
Bitcoin had its first bubble based on nothing but a vision, albeit a real one down the road. You get invisible coins – which don’t give you ownership of the company.
The first internet bubble saw stocks with little sales and almost no earnings soar for no good reason, except that “this was the next big thing.”
And it was. But not until many years and almost two decades later.
Look at this chart based on the internet index back to 1997 compared to bitcoin in recent years.
