At the very end of November 2017, Wall Street insider and legendary investor Paul Mampilly wrote a blog article predicting the bubble in Bitcoin and other cryptocurrencies would soon crash and burn. On that day, it was actually beginning the period of its greatest volatility to the upside. That’s about when it rose from around $10,000 to nearly $20,000 in just a few days. Bitcoin has now gone below $10,000, and may never recover.
But Paul Mampilly already realized cryptocoins were experiencing an unsustainable bubble, and prices could not keep going up. He has seen bubbles before. He began his investing career as an analyst for Bankers Trust back in 1991. By the time the dot com tech boom began to take off in 1995 right after Netscape went public, he was managing millions of dollars for such institutions as ING, the Royal Bank of Scotland and Deutche Bank. He himself made a lot of money during that boom. But he sold in 1999. As he says in the blog post, he sold too early. He watched from the sidelines as the stocks he had owned continued to jump 20%, 30% and more. He felt dumb, believed he was missing out. He had a friend who had invested in an Internet stock that had gone up 1,000%. She considered herself rich, and stopped talking to Paul Mampilly when he advised to sell, to take her profits and run. However, when the Tech Wreck hit the market in 2000 and 2001, he felt a lot smarter. His money was safe.
And in late November Paul Mampilly saw the same kind of market in Bitcoin. If you sold when his blog article appeared, you would have missed out on a few weeks of extreme highs of close to $20,000, but you would now be sitting on your profits. Your money would be safe.To know more, Click here.
Paul Mampilly noticed the same thing about Bitcoin he noted in dot com investors back in 1999. As the bubble continues to grow, nobody wants to sell. The math of investing says when the market is high and you have major profits of 1,000% or more, to sell before it comes crashing down. If you get out too early, it’s okay, but you’ve still got a large profit to protect. But people’s emotions drive them to expect even larger gains. Why settle for 1,000% when the stock or coin will keep going up another 1,000% next week? That’s the essence of a bubble.
Paul Mampilly @ Twitter