Jurrien Timmer, Global Macro Director of Fidelity Investments, says crypto-assets’ alternating bullish and bearish cycles are similar to the tech bubble.
Timmer notes that Amazon and Apple are some of the tech stocks that have emerged as winners from the tech bubble say that the crypto industry is in similar circumstances where some digital assets will rise while others will die.
According to Timmer, Bitcoin (BTC) could be the “Apple” of crypto assets.
“Crypto’s boom-bust cycle can be compared to the dot-com bubble of the late 1990s. The Internet bubble propelled many unqualified stocks to astronomical heights, only to see them lose most or all of their value when the bubble burst.
In doing so, the long-term winners, such as Apple and Amazon, were separated from the losers. The same has been proven for crypto so far. If we assume that Bitcoin is the Apple of the digital asset age, then it might make sense that Bitcoin not only survives the crypto winter, but actually thrives and captures market share from other digital assets.”
As we overlay Bitcoin’s current chart over Apple and an internet stock index chart from two decades ago, it seems that Timmer suggest that BTC has shown similar price action against the two.
“Below I show an overlay of Bitcoin today versus Apple two decades ago (left), and Bitcoin versus the Interactive Internet Index (IIX) on the right. The IIX was a now-defunct index of internet stocks whose value had come full circle from nothing to bubble back to nothing.
According to Timmer, the Apple share recovered afterwards traps significantly during the dotcom bubble and it remains to be seen whether Bitcoin will do the same.
“Note that even stalwarts like Apple suffered a major setback when the bubble burst, but recovered to become a dominant force while so many also fell into obscurity. Time will tell what Bitcoin has in store.”
Apple (AAPL), which ended 2002 at $0.22, is trading at $177.25 as of Wednesday’s close — a gain of about 80.345%.
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Image generated: Midway through the journey