A look at similarities between the 2000 dot-com bubble & post-COVID-19 bubble
Regardless of the prevailing variations between the 2000 dot-com bubble and the post-COVID-19 bubble, they nonetheless share quite a few similarities. The 2000 tech bubble started within the late Nineties and continued till 2002, whereas the post-COVID-19 bubble began in 2019 and lasted till 2022.
Let’s take a look at each eras:
Dot-com Bubble:
The dot-com bubble, also referred to as the Web bubble, manifested from speculative investing, an abundance of enterprise capital funding, and a failure of dot-coms to supply both product or actual income.
Within the midst of capital markets pouring cash into the sector, start-ups have been in a race to grow to be large shortly and corporations with out proprietary know-how deserted fiscal duty. Consequently, nearly all of the 457 preliminary public choices (IPOs) made by Web corporations between 1999 and 2000 have been internet-related. Additional, there have been 91 IPOs within the first quarter of 2000 alone.
Ultimately, the bubble burst, leaving many buyers with steep losses. Nevertheless, regardless of the bubble, Amazon, eBay, and Priceline have managed to outlive. Moreover, this laid the inspiration for web purposes like Twitter and Fb which ushered in a brand new period of communication and know-how.
Covid-19 Bubble:
Through the Covid-19 lockdowns, narratives modified from centralized communication know-how to a concentrate on decentralized know-how for some on the chopping fringe of the tech business.
Just like the 2000 tec bubble, the Covid-19 bubble was additionally accompanied by a lot hypothesis for digital belongings and a rise in out there capital because of quantitative easing and stimulus checks.
Bitcoin’s value was $19,000 in November 2020, however by 13 March 2021, it had surpassed $61,000 for the primary time as extra investments led to a rise in market cap. Cryptocurrencies like Ethereum, Solana, and DogeCoin additionally rose sharply. Bitcoin and Ethereum peaked at $67,566.83 and $4,812.09, respectively, on November 7, 2021.
Moreover, Coinbase, the much-hyped crypto change, went public on NASDAQ on April 14. Its market cap climbed to $85.8 billion because the share value grew by 31% to $328.28 on its first day.
By the tip of 2021, the crypto market started to fall together with the remainder of the market. Throughout September 2022, Bitcoin fell under the 20k mark, together with different altcoins and NFTs.
On 10 Might 2022, Coinbase, with shares down practically 80% from their peak, introduced that individuals would lose their funds in the event that they went bankrupt. As well as, companies like Celsius Community and SkyBridge Capital introduced the halt of withdrawals and transfers.
Regardless of this, the COVID-19 bubble did have an enormous influence on Bitcoin and Ethereum costs. Presently, even after Fed’s current price hikes, Bitcoin may very well be seen as a extra secure wager than safer belongings like Gold and NASDAQ.
One notable similarity between these two eras is rampant hypothesis. Within the 2000s, intense hypothesis about dot-coms dominated international discussions. Now, there’s rising hypothesis about Bitcoin, DeFi, meme cash, and NFTs.
Additional, amid each the tech bubble and the COVID-19 bubble, VCs stored investing, displaying confidence in the way forward for these industries.
Notably, the financial and monetary surroundings obtained about 22 years in the past differs from now. Then, the US was the undisputed international chief, and markets ran easily. Now, the worldwide market is enduring rampant inflation, leaving the US struggling to retain its standing.
