Paul Mampilly Knows a Bubble When He Sees One

Paul Mampilly believes that the Bitcoin crash is going to happen and that it will happen sooner rather than later.

The reason for this is simple. There is nothing substantial that is driving the price of bitcoin up. The only reason why Bitcoin continues to rise is that people believe it is going to rise. People believe it is going to rise, so they buy Bitcoin, which causes it to rise even more, which causes the media outlets to start talking about how Bitcoin is rising, which causes people to believe that Bitcoin is going to rise, which causes more people to buy Bitcoin, and so on. In other words, it is a never ending cycle that feeds off itself. That is exactly the problem. This cycle can not go on forever, since there is nothing substantial that is driving the price of Bitcoin up. Since speculation is the only thing that is causing Bitcoin to rise, the Bitcoin market is very fragile, because that speculation can cease and Bitcoin can drop dramatically.

It is just like the dotcom bubble in 1999. The reason stocks in the dotcom industry started to rise so much was mainly speculation. People thought that it is going to be the thing of the future and that prices were going to rise, so they bought more stocks. In the end, the whole thing collapsed, or in other words, the bubble popped.

Another reason why prices start to drop is that people who bought stocks early start wanting to make profits, so as soon as the prices reach an insane peak, they start selling. As more and more people start selling, the prices continue to drop. Many people will refuse to sell, because their greed will get the better of them, and they will hold onto the hope that the prices will go back up again.

Paul Mampilly says that during his twenty years of experience with trading, he has gone through around twenty five bubbles. Paul Mampilly knows a bubble when he sees one, and he believes that Bitcoin will burst and people will start losing their hard earned money.

Paul Mampilly is the senior editor at Banyan Hill Publishing and the founder of Profits Unlimited. He is an investor with decades of experience, although he currently considers himself somewhat retired from Wall Street.

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