The Dot-Com bubble is firmly etched in the minds of many people. It was an important point in human history.
Certainly it might seem like an overstatement when discussing the concept of the stock market to human progress. However, in this instance, it changed the course of humanity, albeit not directly.
The Dot-Com bubble was a massive run up during the late 1990s and early 2000s in the equities market. This was driven by the hype surrounding the Internet. Many people saw the potential of this new medium and the propaganda hit a feverish pace.
Of course, much which was promoted was garbage. There were companies with ridiculous valuations that were not going to make money. Some very good ideas were doomed to fail simply because of timing. That said, a lot of what took place was just nuts.
Does this sound familiar?
So what made the Dot-Com bubble so important to humanity?
Bear markets are cleansing. They come in, with a sledge hammer, and obliterate all that is not strong. Anything that is fluff as well as excess gets washed away.
While painful, this is very healthy. During the Dot-Com era, there were people getting millions of dollars simply because they claimed they were going to build an application. The "Internet Super Highway" was the basis for the new economy.
Everyone wanted a piece.
This inclination turned out to be right. The economy was forever changed although not in the way many imagined and certainly not on the time frame that was espoused. It took more than a decade for a company like Amazon to become a major force.
Here is where the reality of change ran head on into the tendency to hype. Whereas fantasy was the driving force for higher stock prices, the underlying push forward was taking place.
Nevertheless, something had to break.
Of course, Yahoo at $475 per share told us exactly what was going to give. The market broke and in a hard way. The excess was cleared out and many investors (speculators) left, not to return to the markets for many years.
It was a catharsis in many ways. Once the lunacy left the building, some actual work got done.
We are witnessing history repeating itself.
There is no doubt the Internet changed society forever. The way we interact, work, and play was all radically altered. Now, we are embarking upon another revolution taking place.
Like the last time, this is evolutionary. It will take more than a decade to truly see the results. The "Amazon" of this era still has yet to emerge. It is there and we must find it.
With the bear market, we see the excess in cryptocurrency being removed. A lot of the fluff that was present over the last few years is now dying. The first wave came with the popping of the ICO craze. That saw the ending of outright foolishness.
This time, things are a bit different in that we had actual companies that were operating. Nevertheless, their business models were such that unsustainability was present. When the music stopped, bankruptcy filings started.
Again, while this is painful, it is healthy. Just like the Dot-Com bubble had to end, so did the cryptocurrency craze. Now, we see a contraction that actually makes the industry more powerful.
The markets do not lead to success. That is not where the builders are located. Instead, those who are making the change possible are hard at work in spite of the bear. Nothing is stopping them.
That is where the future lies. They are the ones who know what it will be since they decided to build it.
Blockchain is very powerful. Those that are building on it are going to find a great impact is made. That said, nothing everything is going to be a stunning success.
Nevertheless, there will be Amazon, Facebook, Netflix, and Priceline type opportunities. Cryptocurrency is something that allows all to participate.
Most people run away when they should remain. We see this each bear cycle. When prices start to drop, many just exit. They allow the market to dictate the opportunities that they are presented with. Obviously, by leaving, they have few.
Those that remain are the ones who will benefit. It is not easy to endure massive volatility. However, when we focus upon the paradigm shift that is starting to take place, we can see how the financial benefits can be enormous.
Indeed, we are likely looking at the greatest wealth generator in human history. As stated, this will take more than a decade to play out but the time to be in is now. Many regret leaving the market when Amazon and Google were a fraction of the price they are today. Yet, that behavior is being replicated with cryptocurrency.
There are coins and tokens that have 10x-100x moves in them. in fact, there are going to be a large number of them. The one thing we do know is we will not find them from the sidelines.
The Dot-Com bubble was a turning point in history. Sadly, for most who were involved, they turned tail and ran. The pain of market action was too much for them.
We can see some parallels between what happened with cryptocurrency and that era. Will the same thing occur post crash? Time will tell. However, since the underlying is technological advancement, it is safe to say there is a good chance history will repeat itself.
Those that remain strong and focus upon the long term will likely do well.
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