Investor, financial advisor and former hedge fund manager Paul Mampilly is predicting the impending crash of the cryptocurrency market, as he foresees the seemingly infinitely-expanding bubble finally bursting. While Mampilly is making no declarations as to exactly when the crash is due to occur, he is certain it is imminent and will result in investments being wiped out for many.
Mampilly, in his prediction, drew a comparison between the modern cryptocurrency bubble and the Dot-com bubble of the late nineties that saw soaring technology stock prices eventually plummet into virtual worthlessness. This bubble saw stocks from leading technology companies such as Qualcomm rise precipitously; Qualcomm shares saw a 2,619% jump in value in the period before the crash, while more than a dozen other companies saw a jolt in their stock value of more than 900%, with many eclipsing the 1000% mark in value increase. View Paul’s profile on Linkedin.
Mampilly, himself a holder of technology stocks at the time, suspected that the bubble would eventually burst, and based on this suspicion, sold all of his technology shares in 1999. While a period of regret set in following his decision to sell as the values of shares continued to climb, the subsequent crash in 2000 and 2001 proved Mampilly’s intuition correct. Read more articles by Paul Mampilly at Banyan Hill.
A bubble happens when financial assets are traded at rates that outpace their practical value. One hallmark of an economic bubble is when public interest in an asset leads to an upswell of investors, which in turn results in a precipitous rise in value for the asset. Such a rise is inherently unsustainable, and the risks in this case are exacerbated by the fact that the true monetary value of cryptocurrencies is still largely unknown.
The current cryptocurrency bubble is seeing relatively new investors becoming millionaires in months. Bitcoin shares are at the moment valued at over $19,000, making this not only the optimal time to sell, but an indicator of an impending crash according to Mampilly.