Two Booms, Two Busts: How Bitcoin is Following in the NASDAQ’s Footsteps

(TechCrunch) Tuesday at TechCrunch Disrupt we hosted a panel discussing Bitcoin. During the course of that discussion, I noticed something interesting: The former boom in the price of Bitcoin, and its ensuing refractory period, is quite similar to the NASDAQ’s infamous boom in the late ’90s.

For fun, we’ve taken a graph of each, and stacked them on top of each other. What can get from this? That booms are – at least in some cases – quite similar. The security here doesn’t really matter, in this case public stock against a digital cryptocurrency. It’s quite interesting to see that what is being traded matters less than the market sentiment that surrounds it.

There is a long, slow, measured, low-VIX period (a period of limited volatility), followed by a crazed shot to heights. A sharp correction ensues, the market tests new support levels, and, following, a slow incline is established.