...Mark Williams then goes on to say that every asset bubble has three phases: growth, maturity and pop. He believes that 2013 was the maturity stage and we are now entering the time when the bubble pops. ...
FAIL!
But a revealing one. Back in 1998, I bought the then-new Contrarian Investment Strategies: The Next Generation by David Dreman. His "contrarian" strategy is essentially a low P/E strategy: its base is to confine your picks to the stocks that are in the lowest quintile of market P/Es while chopping out the small-cap issues. The strategy itself is great: I even gave a it fantasy-account real-time whirl from May '09 to May '10 at Marketocracy and it worked very well. The purely passive option - after chopping out the stocks with zero dividends and stocks with a dividend rate below the S&P 500's average dividend % - beat the S&P 500 handily and was in the top 20 percentile of fantasy accounts.
But...part of his training manual involves eschewing hot stocks. That gave his book a funny part in retrospect. In order to drum in the idea that chasing fad stocks is a sucker bet, he discussed bubbles past and popped. One of those bubbles was...the Internet bubble, which he implied had popped in 1997!
[Actually, a lot of mid-90s Internet IPOs like Yahoo! were decimated in late '97. One of them, Spyglass, never came back. At the time his book went to press, YHOO was still humbled.]
And that taught me a very important market lesson. People who are skeptical, rut-stuck but common-sensical - the ones who like to watch bubbles and handicap when they'll end while staying safely away - are good at spotting bubbles. But they always call the top of a bubble much, much earlier than the real top. In the case of 'ordinary' bubbles in the stock market, they call the top two to three years early. [Informed guesstimate.] With assets that raise emotions, like gold and (yes) Bitcoin, there's usually a bit of fud lurking in their heads so they tend to be significantly earlier than three years early.
I understand that the new meme in these parts is that crypto now is like the Internet itself as of ~1994. I not only agree with it, but I've also gotten several early-Internet tidbits that show what a good analogy it is. But the trouble is, when I buy into a concept I spend some time thinking about it.
And what I've been thinking in re the current meme is: if it holds up, there is going to be a rather big bubble in cryptocurrencies that will climax around 2020 or so.
Of course, that leaves six years for the analogy to break down, but...