Paul Mampilly is a respected American investment guru with over 25 years of experience trading in the stock markets. Paul who is also a senior editor at Banyan Hill has recently given his opinion about investment in cryptocurrencies. In an article published late last year, he compared investors in the cryptocurrencies to those who invested in the technology stock of 1999. The two investment are similar in all aspects. The mode of execution is also the same for the two. Paul Mampilly witnessed the 1999 stock bubble happen, and he is confident to say that cryptocurrency investment is a bubble that will soon burst.
In 1999 when the technology bubble happened, Paul Mampilly had stayed out of the investment just like he has done with cryptocurrencies. He does not own even a single Bitcoin or any other digital currency out there. He has his reason to believe that this is a bubble that will explode sooner than later. Paul Mampilly in his article, he has detailed how the stock bubble happened and why he believes that what happened then will happen again with the cryptocurrencies.The technology stocks had gone up by huge percentages just like Bitcoin and others today. The prices kept going up, and every time they increased a new batch of investors would be drawn into the investment. No investor wants to miss out on something that was gaining at the rate the stocks were gaining, or the cryptocurrencies are doing right now. As investors try to make some quick money in such investment, they fail to take note that they might be entering right at the end of the trend.
Many new investors are easily drawn in when the prices start going up rapidly. In an attempt to make quick profits new investors will join at just any point and without even conducting some research to know what are the market expectations. One thing with bubbles is that they draw investors in and then keep on giving false signals that the stock will keep going up. Investors hold on to their investments even as prices go down. With the hype surrounding bubble investments, every investor is always looking for prices increases and not decreases. So, when prices are going down, investors keep buying the idea that they will go up again. By the time, they wake up and realize the investment is going down, all their money is gone, and there is nothing to salvage.For Paul, Mampilly advice should be followed keenly by any investor who has invested in cryptocurrency. The same fate that fell the technology stocks is likely to happen again, this time in the cryptocurrencies industry.