brian wang

The dot-com bubble was a historic economic bubble ran from 1997 to 2001. It was a period of extreme growth in the usage and adaptation of the Internet. Between 1995 and 2000, the Nasdaq Composite stock market index rose 400%. It reached a price–earnings ratio of 200.

From March to November 2000, internet stocks dropped by 75% from their highs and $1.8 trillion in value was lost. By the end of the stock market downturn of 2002, overall stocks had lost $5 trillion in market capitalization since the peak. 48% of dot-com companies survived through 2004. On March 2, 2015, the NASDAQ closed above 5,000 for the first time since March 9, 2000. In 2017, the Nasdaq surpassed the inflation-adjusted bubble high from March 10, 2000.

Here we look at the hottest things right now. They are cryptocurrency, blockchain, artificial intelligence and cannabis (Marijuana). What are the claims for ultimate potential? Are they in the early days of very long run ups? Are they late in bubbles?

Cryptocurrency and Blockchain future domination or collapse

There are many assertions of cryptocurrency and blockchain bubbles. The bubble claims are that the current and potential values are fabrications. Cryptocurrencies will fail or Cryptocurrencies and blockchains will fail or some of it will succeed but only after a long collapse.

The total combined market cap of cryptocurrencies reached $814 billion on Jan 8, 2018 and is now at $285 billion. It has been as low as $234 billion in 2018. The total combined market cap of all cryptocurrencies was less than $15 billion at times in January 2017.

Tim Draper made the accurate prediction that Bitcoin would hit $10,000 by 2017. Tim’s idea was Bitcoin was going to be easy enough and that people would be able to start trading with it and using it as a store of value.

Eventually cryptocurrencies, like Bitcoin will be used in mainstream situations. Draper predicts Cryptocurrencies will eventually replace credit cards and you will make crypto payments by phone. Cryptocurrency will replace fiat currencies entirely.

There is about $80 trillion worth of fiat currency in the world. Cryptocurrencies will expand that market. Draper says cryptocurrencies will eventually grow to maybe $100 trillion and fiat currencies will fall from $80 trillion to $30 trillion. He thinks Bitcoin might end up with a 20% to 30% market share. Draper predicts it will take 10-15 years to reach $100 trillion. He predicts Bitcoin will be at $250,000 by 2022.

Others predict multi-trillion markets for blockchain. The case is that blockchain will be used to make finance, stock trading and the global supply chain vastly more efficient.

Marijuana – Cannabis legalization in Canada, USA and other countries

Canada has the legalization of cannabis (marijuana). There is rapid booms and busts in the market.

There was a peak of around C$31 billion in the valuation Canadian Cannabis companies.

The USA has had legalization in several states and could see nationwide legalization.

If there were broadly legal cannabis industries in the US and other larger markets could be 20 to 100 times as large as what has happened so far in Canada.

Grand View Research forecasts legal global pot sales reaching $146.4 billion by the end of 2025. Aaron Salz, the founder and CEO of Toronto-based Stoic Advisory believes the global pot market could reach $1 trillion in a decade or less.

AI derived businesses

Global business value derived from artificial intelligence (AI) will total $1.2 trillion in 2018. This is an increase of 70% from 2017, according to Gartner. AI-derived business value is forecast to reach $3.9 trillion in 2022.

PwC forecasted that global GDP will be 14% higher in 2030 as a result of AI which means an additional $15.7 trillion.