CryptoOracle partner Lou Kerner believes that Bitcoin should be viewed in the same light as Amazon after the dot-com bubble of the late 90s.
Some Very Humble Beginnings
In May 1997, Amazon went public at roughly $18 a share. The stock did very well, and by the end of 1998, Amazon shares were selling for roughly $300 each. Unfortunately, in both January and September of 1999, Amazon underwent two different splits that caused stocks to fall to $6 a share – a massive loss for anyone that had been involved since the beginning.
Kerner explains:
If you go back to the internet bubble, which is what a lot of us in crypto look at for direction, Amazon, arguably one of the greatest companies in the history of mankind, was down over 95 percent over two years.
From Little Guy to Major Player
In September of 2018, Amazon became the second U.S.-based company to spike beyond the $1 trillion mark after Apple. At the time, each share was selling for well over $2,000 each, making everyone who had been around since the beginning extremely rich.
Kerner believes that cryptocurrency, specifically Bitcoin, is vulnerable to the same circumstances and that, while the asset can fall victim to volatility, this is simply part of the game that longtime investors must play:
There was a day in 2013 where we were down 70 percent overnight. Nobody likes being down like this, but this is what investing in crypto is all about. […] Crypto has been so weak because with most of it, there’s no underlying value outside of confidence.
He also added:
[But] bitcoin, itself, we think is going to replace gold eventually, and gold is an $8 trillion thing. I think it’s a store of value. I think it’s the greatest store of value ever created. It won’t happen overnight, but bitcoin should surpass gold over time.
There’s No Comparison, People
A somewhat contrasting opinion comes from Angel Versetti, CEO of the blockchain technology firm Ambrosus. While Kerner wants to compare Bitcoin with the dot-com bubble, Versetti’s sentiment differs in that he doesn’t believe Bitcoin is anywhere close to becoming a bubble, and thus the circumstances change dramatically. He states:
I wouldn’t compare the current state of the crypto market to the dot-come bubble at all. While there are similarities in terms of overvalued new technology startups with unproven or unsustainable business models that were incessant in both dot-com and crypto, the sheer scale of crypto and dot-com businesses isn’t comparable. I don’t believe we are, or were, anywhere close to a bubble with cryptocurrency. We are experiencing a strong correction, but the bubble has not formed yet.
Would you make the comparison between Bitcoin and the dot-com boom? Why or why not? Let us know in the comments below.
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