Fun with Fractals, Part Deux
Bitcoin vs bubbles: Nasdaq, Biotech and Topix 1972 -> 3x to 40x above all time highs
- Each of the prior bubbles saw a parabolic rise and a subsequent 85%-90% drawdown, which took multi-years to complete (Slide 4). And arguably the bubbles of Nasdaq, Biotech and Japan had common threads. Secular growth, seeming limitless capital inflows and lots of optimism. This fueled the parabolic rise on all 3 bubbles and the bursting was a painful retracement.
- This could also describe Bitcoin in 2016-2017 run-up as well. And the extended 400-plus day decline seen in 2018 was process to burst and eradicate that bubble (Slide 5 and Slide 3). The media was celebrating the bursting of the Bitcoin bubble, not only in the Summer of 2018 but even more recently, as reflected in the included headlines from Investor Business Daily and from Marketwatch.com.
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