Yes! And that's actually a good thing.
Continue reading to find out why.
Bubbles!!!
Firstly, what is a bubble?
A bubble is an economic cycle that is characterized by the rapid escalation of market value, particularly in the price of assets. This fast inflation is followed by a quick decrease in value or a contraction, which is sometimes referred to as a "crash" or a "bubble burst." ~Investopedia
There're 3 key points to note in this definition:
It is a cycle
Escalation of prices in the early stages
A sharp decrease in price in the later stages
Keep these at the back of your mind, as they're central to this discussion.
Past Bubbles
All through history, there's always been one bubble or the other popping up every so often to make some rich and others, well, worse-off.
Below are the 5 biggest previous bubbles according to Investopedia. It's beyond the scope of this post for me to talk about them, so please kindly go read about them on Investopedia
The Dutch Tulip Bubble
The South Sea Bubble
Japan's Real Estate
Stock Market Bubble
The Dotcom Bubble
The U.S. Housing Bubble
One misconception some people have about a bubble is that it will come and go.
No!
It comes, bursts, and gives birth to a more mature and established market system.
Similar to how irresponsible or clueless adolescents and teenagers grow into responsible and mature adults with all the knowledge and experience they have acquired in their growing up.
What is good about the crypto bubble?
The good thing about this crypto bubble is that you're early.
It hasn't "burst" yet!
And the Google, Amazon, and Facebook of crypto haven't been determined yet which leaves a great room of opportunity for smart entrepreneurs, innovators, and inventors to build the leading organizations and products of the future.
When this bubble finally bursts, only the valuable projects will survive and thrive.
The majority of shitcoins hiding under the umbrella of DeFi will bite the dust.
There's been very little in terms of mergers and acquisitions in the crypto space.
Expect this to change in the next decade.
Many more projects and companies will be merging or getting acquired by ambitious entrepreneurs looking to build the crypto giants of the future.
When will it burst?
The real question is, when will it burst next?
The crypto bubble is a special one.
Special in the sense that while all the past bubbles have been characterized by a single major rapid growth followed by a sharp fall, the crypto bubble bursts in phases.
That means we have already experienced a few bursts already such as from 2017 when the crypto market achieved its current all-time high (ATH) through 2019.
We're currently at the beginning of another phase of the crypto bubble.
And after each bubble, the market matures and becomes more rational and stable than it was before.
What should I do now?
Join and ride the bubble.
The longer you take to join this bubble the less opportunity you will have.
Bubbles don't happen in everyone's lifetime and worse they're not easily predicted.
So when you're lucky to catch one, you ride it hard and wisely.
It is foolish to think that crypto will phase-out.
It wouldn't.
The only thing that will happen is that money will move from the irresponsibly greedy investors to the smart ones.
More so, useless and less competitive projects will die off, get acquired on the cheap, or merge to survive.
Thus giving birth to the crypto giants of the future, similar to how we have the internet giants of today after the "internet bubble"
This is natural and expected.
Whether you're going to be on the good side of this historic movement or not is entirely up to you, based on the decision and actions you take going forward.
Are you riding this bubble? Share your experience and expectations with us in the comments section below.
I was just talking about this on d.Buzz the other day, Cryptocurrency being a bubble is a good thing.
I love your Teenager analogy because it's surprisingly accurate!