Bubble! Bubble! Bubble!
Bubble! Screamed the Financial Advisor!
Crypto is a Bubble! Everyone knows that, say the masses!
Well, guess what, there's a huge bubble getting ready to burst all over their faces, and it isn't the grand new shiny bubble of Crypto.
No!
It's the sludge bubble that is the Stock Market. Investors are starting to fear these movements, and you can already see big financial institutions quivering with fear... not on their own wallets but for having the work they had back in 2009 to convince states to give them the people's money to bail them out.
Throughout this post we will look at the CAPE Index and on how it predicts a bubble bursting in no time.
We'll also go over what will happen and the effects it will have on Crypto.
If that's something you're interested in, read below.
The Stock Market Skyrocket: Over the Moon
So, is Wall Street getting pumped up to oblivion again?
This is the question that every stock broker asks himself every once in a while… but the answers have a cost, and that cost is too high.
In the last couple of months, people have began to worry, because since last year the growth is gigantic.
Not only that, but the fact that the world is getting better from 2009’s crisis is getting everyone’s hopes up and they have been pouring all of those hopes in the market.
Dow Jones went up 25% in the last year, and stock markets throughout the world have followed.
Here in Portugal, where I’m located, the PSI20 index has gone up 20% in the last 12 months, so you can see the trend is close to global.
One of the most useful tools we have to predict bubbles is the CAPE index.
Cape stands for Cyclically Adjusted Price-to-Earnings and was created by the Nobel Prize winner Robert Shiller.
Now, look at this graph and you can tell that the values have now entered “Danger Zone”.
Note that in Crypto Currency trading, graphs like this happen all the time… but not in the Stock Market.
- What does the graph tell us?
Well, the first High was the 1929 crisis, the second high was the 2000 dotcom bubble... and you can see what happens in a few.
How ironic, that the same people who call Crypto a bubble are living inside one and risk having all their possessions blown away by their “safer” approach to trading.
How Will the Bubble Bursting Affect the Crypto Market?
Now, this is what all people are asking themselves right now.
- How will the crash affect the Crypto Market.
Well, in the short term it will be bad, since companies will suffer a huge blow and therefore innovation will come to an halt in the first few moments.
But in the long term it will be GREAT!
It will be great by mainly two reasons:
- Moments of "After-Crisis" are shown to be the moments in which Innovation and Technology Adoption rise substantially.
- A Crash in the Stock Markets marks the inferiority of the current economic model and FIAT altogether.
So, if you fear for Crypto - don't!
Crypto is a paradigm shift, and this explosion will happen in the old paradigm, so it even plays nicely on our plans and expectations.
Again, how ironic that the "riskiest choice" happens to be the safer one.
In Conclusion
So, in conclusion - when this all happens you can finally stick it up everyone who has been telling you you're a fool for "gambling" in Crypto.
When this happens, you can rest assured your economies are safe, cryptoed in several different tokens that will only see raises as the economy recovers and people leave the old paradigm to adopt the new.
And you'll then be laughing while going to the bank, to cash in since you're tokens went to the moon and further.
Pass by the stock brokers' counter and drop them a business card saying:
Jason Oak
Crypto-Trader
Dial 1-800-FCKU!
How cool will that be?
Hehehe.
Cheers!
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I have to say I hope that a bubble will explode, in cryptos, in fiat, in the whole market. The whole system is rigged. I'm not about communism but I think we as society need a better way than defining everything by money.
90% of the people don't do what they want, because of that. Maybe even more. And half of them who think they do what they want, don't see how hurtful their job for the world is.
Sorry goes a little bit over the top regarding your post. Just remembered it by reading it.
Well, crypto is the first coming of the world of abundance in the face of the old scarcity paradigm.
Let's hope it brings more wealth to everyone!
Thanks for the comment mate.
Hope so too.
Programmable money has arrived and with this development people’s interests can finally become aligned with money... so in a decade or so (perhaps sooner) society no longer will define everything by the traditional speculative money... leading the way to a new pro-communities spirit.
Also, steemit can be a part of this pro-communities spirit. It starts in a way with people getting paid for doing what they love or for helping others, or for showing problems in the world and offering solutions.
Excited to see where it will go
Good thoughts friend :)
A lot of negative news lately China has been giving us. We just need to wait out the whole storm. Big uncles stuff their pockets.
Now everything falls, including the stock markets, but for some reason they all rushed to discuss crypto-currencies and call it a bubble, this is not so.
For big growth, there is always a big drop, this is the rule of the stock market, but not the crypto currency, so we wait and do not worry :)
Thank you
Oh Im not worried Franky.
Not worried in the slightest!
I'm not saying that you're worried :)
this is a generalized statement
My friend, when it unfolds, there will be no bank and the crypos will be the default currency at which point your wallet is the bank. People will want cryptos and we will trade them like we trade dollars now. Except there will be no need to trade to dollars as they will be gone. So nobody will be taking it to the bank! :)
Hehe! Guess in the future even these expressions will start to change.
I didn't think about that :D
Glad to see you around White!
Cheers!
hmmm ... very good points. and we used to say stock market was unpredictable ... now crypto is a constant blowing and shrinking bubble, way less predictable, yet so far nobody can give proven answer of when it will be mainstream, much bit like the web circa 1994!
Yeah, who knows...
... but I know that when it becomes mainstream I'll be ready!
I love these kinds of posts. It's exactly what I/ we need to hear these days when we tend to get a little negative.
Can't wait for the time that I can proudly say that I'm a crypto investor and working for/ being paid in crypto, with a smile on my face instead of others laughing at me when I tell them about it.
It angers me a little how people - who know hardly anything about it - tend to brush it away with a couple of words, repeating what they heard in the news. Not even taking the time listening to my explanation. It's exactly these kind of people who will never learn and might end up being the poor ones in the end.
Thanks for these positive words, bro!
Yet those people are posting on Facebook how they aren't like the majority and alerting others to the fact they are being brainwashed by media... oh the irony :D
Exactamente! :>)
Hah, a very entertaining read, @spiritualmax! I'm very curious how will the events unfold. I like your thoughts on the topic, but I also like how you structure your post and those dragon dividers are cool! You're some very inspiring fellow Steemian, you know :)
All the best,
Klaudia
Thank you Klaudia :D
You're far too kind! Glad you enjoy my dividers hehe.
Cheers!
I find it kind of ironic that people that I know think it’s OK to laugh in my face and say that they are happy that the crypto market is crashing when they know how much time I have spent researching it over the last six months. If I were to tell them that I would be happy if they lost everything in the stock market I doubt they’d ever talk to me again...🤷🏻♀️
Yeah... it's like that for everyone... they think we're loonies :D
Thank you for the history lesson, it was informative! My question is, how soon do you see the stock market crash coming? And secondly, what effect do you think the bitcoin futures market has on the current price dip? Thanks in advance!
The price dip in Bitcoin and in every other crypto market is powered by the huge resistance by traditional institutions and FUD. I don't believe the futures market has much of a say in that way.
On the other hand, the stock market can grow for a little bit more. Perhaps 1 year, perhaps 5, who knows, but I don't see it happening in the next 6 months.
That's really interesting, I wonder the financial crisis from 2008 is a different bubble? It was a housing bubble? I am very new in understanding all these things. I have to say that since I understand a bit more I look different at currency which is a good thing I believe. Last question: why do you think crypto currency will be spared if the stock market crashes?
For the two reasons mentioned above... the first one being that innovation and adoption of new technologies rise in after-crisis moments, and so crypto will enjoy a bigger adoption rate and more projects will be built using blockchain and hashgraph, and the second one being that is the traditional economy proving that the only bubble was the stockmarket not crypto.
Ah, I understand. Thank you very much
Its hard to stay calm and pretend not to be scared. The forces against crypto are really strong. FUD is very powerful and it really destroys a lot of hopes.
Not mine, do yours get destroyed? :)
Well, not so strong to completely destroy my trust in the future of crypto entirely. However, I could liken it to cracks on a wall...which eventually sum up to the fall of it all.
Nop, programmable money has arrived...
you did forget the 1987 crash, great post though! I'm very worried as well once this economy crashes what will the government and the fed do to "rebound" or make it look like a rebound... My guess is we will see the new new deal, and the masses will eat it up.
Indeed, the 87 crash could have been mentioned.
As far as the second point, who knows, only they
When people tell me they think Steem is fake money, I tell them some dude thought stock certificates were fake too back in the day. "So you give me this piece of paper that says I own part'o some company in New York City? Sure, and these are magic potatoes"
Indeed!
People fail to see the weaknesses in crypto they point out are present in their fiat system as well.
My friend said to me tonight "Ya but money is bank backed currency" - I asked what that meant. He said "I can take it to the bank any time" - OK, well, once you setup a wallet etc,,, you can do that with cryptos too. "Ya but it's not real money" .... SO, once it's in your bank as dollars, it's still not real money? "Well, sounds fishy to me" .... Ok, can only lead a horse to water as the saying goes...
Hehehehee....
That really seems like that kind of friend who rejoices at every FUD piece on crypto and wags his tail with a huge grin saying "I told you so" in triumph.
People think "they know better".... once you start squeezing them you realize they know nothing at all.
Cheers
Let it burst! It has become very unstable almost impossible to predict its not even wise to invest anymore! Checking Bitcoin is @ $6000 and dropping from $20k like a month ago.!
It may stabilize after bursting, im thinking its a good thing.
These bursts are always a good thing in the long term, it's the short term that gets people!
If there is a bubble in the stock market that will be good for crypto because people will look for places to put their money in.
Crypto would win a lot of legitimacy too.
Nonetheless, the legitimacy and popularity will come one way or another. It’s just a matter of time.
Indeed!
I'm waiting with my pouch of SP at the ready :D
Cheers!
I'm still astounded at how difficult it's been to convince my friend's to get into crypto. The current state of the market isn't helping, and I guess I don't have the time under my belt to explain things the way you do.
I'm hoping you're right. I have a lot more faith in crypto than I did a month ago, and I would certainly like to live to see the age of abundance. I hope if I'm ever laughing to the bank, everyone else is as well, and dropping off half their money on their way out the building to those who aren't :)
Those co-workers will have more than they had, but they won't be well off... they chose to let the big opportunity slip by!
Pretty scary to see charts like that! But I guess many have been saying it for a long time, it has to happen eventually. Frankly I'm glad that I've gotten into crypto if something like that is indeed on the horizon. Nows the time to hodl if there ever was one!
Yeap! The constant Crypto Crashes will weed out the weak.
Those who truly believe and stick with it will be rewarded.
Oh yeah here is the proverbial I told you so.
The blockchain has more uses and application than just for trading, speculation and as fiat.
It will go through the likes of the Telegram, Telephone, Radio, TV and the Internet. It is going to be so massive and game changing that it will render a lot of the middlemen services that banks are doing that is why they are fueling the FUD.
Yeap!
Death to the Gatekeepers!
It's bound to happen. The DJI and S&P 500 are down right now. Looks like it may be the start of a snowball. Market corrections like these is what investors wish for. Lots of money to be made.
And money to be lost in equal measure.... good thing for those on the right end of the stick :D
i think people overs years will understand how crypto works, and will no sell all when price go down, and will be more stable
Let's hope so shotgun!
Good comparison, I'm fairly new into crypto currency. But I know a little about stocks, which I think is similar to crypto currency. In this critical times, one must remember that your investment is as good as paper loss until you sell it.
Exactly! Paper losses are easy to take!
Cheers!
pop goes the weasels
Such depth, much comment.
I approve that spirit! Fantastic post
Thanks dad!
The fact is financial crisis always there waiting us, the crypto mrket unpredict sometime, this is make us fear to see the margin. That is really worried.
Yes, I understand completely.
Thanks for the comment :)
Cheers
Great post! you gained a follower!
Thank you for the follow!