The Crypto Bubble: Learning from the Tech Bubble & What Projects Will Survive?

The tech bubble was a historic economic bubble from 1995 to 2002 where the rapid growth and adoption of the internet led to an overspeculation of subsequent companies. The bubble burst in March of 2000, leading to a two-year bear market, where many stocks tanked and many investors were left penniless. Many seasoned Wall Street vets have, over the past year, compared the tech bubble to the current crypto market.

And they are absolutely right.

Crypto, like the internet in its growth phase, was extremely unknown. How many of you crypto investors understand how a blockchain works? What it does? What a hash rate is? Hell, can you even name a single member of your favorite project’s team? No? But you took little Billy’s college fund and dropped it all in a coin which hoped to provide more efficient supply chain management for Columbian banana farmers?

You aren’t alone.

Back during the tech bubble, even wise venture capitalists were throwing seven figures behind laughable projects, just because they had “dot com” in their names, and they didn’t want to be late to the free money party. The lack of knowledge about a new booming tech enterprise like crypto or the internet is what creates a bubble.

How to Survive the Crypto Bubble 101:

If you are like me, you like to make money. Hell, if you are a human, you like to make money. If you invested in crypto post January, you likely haven’t made money. Most people have been pulling money away from crypto, as the market cap has bled over 70%, and they are smart for doing so. Nevertheless, there is always money to be made in any market.

Be fearful when others are greedy & greedy when others are fearful.

During the tech bubble, Amazon went from a high of $100 to a low of $6. Imagine the loser that bought at $100 and yelled the early 2000’s equivalent of “HODL!” (this stock is da bomb?) and never sold! Today, if he still held, he would have a measly $1,591. If you are in crypto right now, you may be able to find the next Amazon. To do this, there are some prerequisites you must follow. Let’s look at how some top companies rebounded after the bubble burst.

Amazon:

One of the world’s most recognizable brands, led by a bald-headed billionaire, Amazon’s success story is one for the books. Jeff Bezos saw the potential for internet and e-commerce and laid his plan out and followed it every step of the way. Some of the reasons Amazon survived and thrived after the bubble:

  • Lack of competition: All of Amazon’s competitors had died off, which gave Amazon a clear shot to victory.
  • Long-term vision & business model: Amazon, unlike the graveyard of dead tech stocks, had an achievable long-term business model. Bezos made his goals realistic, and honed in on achieving each and every one. His transparency and ability to confidently hit every goal he publicly set for the company made Amazon a good and safer buy to investors.

eBay:

Founded by Pierre Omidyar in 1995, eBay has become a household name for buying and selling anything. The reason eBay stayed around after the dot-com apocalypse is simple:

  • Use Case: This is one of greatest things to look for when throwing money into a new, foreign market like internet of crypto. eBay made sure to expand their product categories to corner the market quick, making it able for any average joe to buy and sell cars, coins, couches, and real estate from the comfort of their home. Simplicity and use case is why eBay employs tens of thousands of people and makes billions a year.

Priceline:

Priceline was founded right before the burst in 1998, yet still was able to recover and thrive. How?

  • Adaptability: Priceline began as a site where users find cheap rates and name their own prices on hotels, car rentals, airfares and vacation packages. It survived the beginning of the burst, but looked terrible after 9/11 when the entire travel industry took a beating. Jeffery Boyd, the new CEO, saw the grim outcome and decided to change the entire view for the company. Priceline now focuses on hotels- over 100k in 100+ countries- and built up an incredible reputation doing so. Focusing on a niche where opportunity is available, and adapting to do so is why Priceline didn’t flatline.

 

After this brief history lesson in bubbles, you may be able to compare your favorite coins to successful companies and see if they are actually good. Below, I will take the reasoning from surviving dot-com stocks and list the top 5 “HODLs” which will survive this bloody bear market.

My Five Top Picks:

  1. BITCOIN: Of course Bitcoin will survive. Bitcoin is the gold standard of crypto. Bitcoin has a use case, and has adoption. Bitcoin is one of the few coins that has ATM’s in thousands of stores, and has been burned into the back of so many minds. If Bitcoin fails, crypto fails.
  2. ETHEREUM: If Ethereum plays its cards right, it will have a promising future. I still think ethereum may have a bit more to fall, due to dApps with no use case, tokens built on the platform with no use case, and money that still hasn’t fully bled out of both. Yet, ethereum has unlimited possibility, and if the current team continues to hit goals, stays transparent, and doesn’t flake and quit, ethereum could still make many people a boatload of cash.
  3. MONERO: Monero will survive because it is the standard of privacy coins. Be it used for many shady things, Monero is able to do what Bitcoin does, and still offers the benefit of complete anonymity. Privacy is something people love, and Monero is able to fulfill this niche perfectly.
  4. CHAINLINK: Chainlink is a one of a kind platform that will revolutionize blockchains. Its use of Oracles will accent smart contracts well and will make chainlink a valuable token along with the ethereum project.
  5. STELLAR: A coin with multiple use cases, actively traded with a good market cap- Stellar grabs a spot on my list. Stellar wins me over due to its ability to minimize transaction costs and disrupt the entire banking industry.

 

I hope this article has shed some light on the current situation us crypto traders are stressing with. I would love to know which project(s) you believe will survive the crypto crash and why; feel free to comment below!

Check my BlockDelta profile for additional articles.

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