Bitcoin’s Boom-Bust Cycle Reminiscent of Dot.com Era

Investing.com – Comparisons to the dot.com era are rarely good.
And that’s the case with Morgan Stanley (NYSE:)’s analysis, which says bitcoin is behaving the way the Nasdaq did two decades ago.
In a note to clients, the Wall Street firm identified general similarities between the price movements and trading volumes of the Nasdaq in late 1999 and early 2000 and bitcoin in late 2017 and early 2018.
Both the Nasdaq and bitcoin posted rallies of more than 250%, before entering sharp downturns.
Once the downturns began, both suffered multiple waves of weakness with average declines of about 45%.
In both cases, there were multiple bear market rallies with average gains of about 40%.
Finally, trading volume was much higher during the downturn periods than the rally periods, indicating what Morgan Stanley calls a “a rush to get out.”
There is one main difference, though. The bitcoin rally played out in a much shorter period of time.

Disclaimer:
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.