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— Paul Mampilly (@MampillyGuru) May 24, 2018
Paul Mampilly, is a past hedge fund manager and current financial expert. He believes that the cryptocurrency bubble is about to erupt. While he doesn’t know when this eruption will occur he believes that it is going to happen in the near future, and that a lot of people are going to lose their money; it will be similar to what happened in 1999.
In the late 1990’s everyone made investments in the technology stock market. This was great for a time, people saw their stock shares sky rocket, some, like Qualcomm Inc., over 2,000 percent. The massive rise it stock drew new investors in, further creating a bubble. However, in 2000 and 2001, that the technology bubble exploded, stocks plummeted, and many people lost their investments, leaving them with nothing. Visit stockgumshoe.com to know more.
Similar, to what happened in the late 1990s, people who have made investments in cryptocurrency are seeing major returns. For example, a number of investors who purchased bitcoin have become millionaires within a few months’ time. However, according to Paul Mampilly, this won’t last.
Bitcoin was created in 2008 and saw major growth reaching a value of $19,000 by the beginning of 2018. Inspired by bitcoin, other forms cryptocurrencies were created. One of which, Ethereum, grew roughly 13,000 percent in just one year. Many tech-investors saw these numbers and wanted in on the massive returns that were happening, believing that cryptocurrency was prime investments to make. However, that did not prove to be the case. Bitcoin went from having a value of $19,000 to $8,000 and according to Mampilly, the worst hasn’t been experienced yet; the bubble hasn’t completely burst but when it does investors will surly lose their money.
A bubble happens when an asset is sold, bought, or traded at a price that is higher than its actual worth. One of the problems with cryptocurrency is that there isn’t an authority figure to determine its real value, but instead, the value is created by the public. Economic bubbles can be hard to identify upfront, but there are a number of warning signs of potential economic bubbles. Paul Mampilly believes that the largest warning is seen when there is a lot of public interest in a specific asset causing prices to sky rocket. Cryptocurrencies, like bitcoin, have certainly experienced this drastic increase in public interest and, therefore, prices. Nonetheless, according to Paul Mampilly, at some point, this economic bubble with reach its maximum capacity and eventually burst.