You’ll agree with me that since the last quarter of 2024, the hype around cryptocurrencies has gone through the roof, as President Trump has shown a friendly stance towards the community.
“Bitcoin to $200k, ETH to $10k” were the sort of predictions flying around. And as talks for clear and friendly regulations are underway, bigger predictions are surfacing. Just last week, an analyst hinted at Bitcoin hitting $1 million soon.
You see, one thing common to all of these predictions is that they are based mainly on market sentiments, not on the actual value of the crypto innovation.
In a financial bubble, asset prices significantly exceed their intrinsic values and no longer reflect the actual risks. This is what happened in the DOTCOM bubble of the 1990s, which ended badly.
In the late 1990s, there was an overvaluation of tech stocks as investors poured funds into internet-based businesses that had little or no revenue models and poor business plans.
In simple terms, it means businesses were hyped and valued just because they were branded as internet-based, and since this was when the ‘’internet’’ broke out, investors were trying to position for good gains.
Eventually, myriads of investors lost massively as the stock market crashed because these internet-branded businesses were unprofitable and crashed — the burst of the bubble.
In 2025, I fear that we may be headed in the same direction as so many businesses are starting to slap blockchain on their names or rebranding to give the impression. Also, tons of start-ups are flooding the crypto scene.
All these are starting to create a crypto bubble that may burst and cause a lot of retail investors and some institutional investors to take a step back if it bursts. If this happens, we may see the prices of premier cryptocurrencies plummet significantly in the coming months.
Not financial advice!
I think out loud a lot. You should watch out for my next thought!
#crypto #blockchain #finance #investment
