Chris Brycki says a cryptocurrency bust could be just what's needed

The current cryptocurrency market is starting to look a lot like the dot-com bubble of 1997-2000, according to Chris Brycki, the founder and CEO of robo advice fund Stockspot.

“Bitcoin and the crypto currency market has already experienced several hype cycles where prices rocketed before falling 80% to 90% as the technology and adoption caught up with inflated expectations,” says Brycki.

“One happened in 2011 and then another two in 2013. We would be close to the end of another crypto hype cycle in early 2018.”

After peaking around US$830 billion in January 2018, the total cryptocurrency market has fallen 33% in three weeks and is worth $US560 billion. That’s up 3000% from a year earlier which means cryptocurrency “investors” are sitting on about $US500 billion of paper profits compared to a year ago.

“The cryptocurrency sector today has some striking similarities the dot-com bubble of 1997-2000,” says Brycki.

“People are pouring billions of dollars into ‘investments’ that have no revenue, profits or dividends, and those assets are rising in price only because others are also tipping money into them.

“As with the 2000 tech bubble, central banks are have implicitly supported this type of speculation by maintaining low interest rates. Near zero interest rates encourages risk taking behaviour since there is very little incentive to leave money sitting in the bank. The crypto boom is the latest variation of the same theme.”

To read more, please click on the link below….

Source: Chris Brycki says a cryptocurrency bust could be just what’s needed | Business Insider