Quote from: gbks on October 26, 2017, 04:14:18 AM

It's called a bubble when something is hugely overvalued. Usually this happens when lots of people are so excited about something that they put a lot more money into it than it is really worth. At some point, the market realizes that the actual worth of this thing is really a lot lower and people start selling it off. That's when the bubble pops. The financial crises of 2008 was also a bubble, caused by too many people buying into real estate (facilitated by shady practices of banks). Some people say Bitcoin is in a bubble because the excitement over it is huge and a lot of money is flowing into it. Hope that helps.

Kudos!

Let me add by citing an example related to technology which is the Dot-com Bubble or Internet Bubble. When the Internet becomes popular in the 90's companies start to invest millions of dollars to websites, some are rushing to buy domains and sell at a much more higher price. When the 20th century arrives, company investments don't generate enough income thus websites together with the company bankrupt one by one. Some notable companies survived like eBay and Amazon among others, but as you can see right now, those two companies are leading.