Back in the late 1990s a slew of Main Street speculators gambled on high-flying tech names, betting the farm on companies that existed on merely a wing and a prayer.
You generally won’t find the same phenomenon these days — at least not in the stock world. Today’s unseasoned speculators hoping for quick riches prefer cryptocurrencies like bitcoin for their pulse-pounding thrills.
CNBC has a good synopsis on how things have shifted in recent years:
During the dot-com euphoria of the late 1990s, ordinary investors piled into shares of young, unproven technology companies and the day-trading taxi driver symbolized the era. But this time ordinary investors are going elsewhere, says Ian Winer, head of equities at Wedbush.
“They’re not playing the stock market anymore. They’re playing all the markets that are less regulated, and one of them is the cryptocurrency market,” Winer said.
“Rather than your average guy or gal buying tech stocks, they’re buying bitcoin or ether,” he said. “I see speculation all over the place. I just don’t see it in the stock market.”
In fact, young investors are more likely to buy bitcoin or other cryptocurrencies like ethereum than stocks at all. As more and more inexperienced investors fear missing out on the big rally, the stakes get more dangerous.
In the end, speculation is speculation — no matter what asset class you’re talking about. It just may be that today’s crypto craze has a lot more in common with the dot-com mania than many investors care to admit.
Bitcoin prices were trading around $2,541 on Monday morning, down 2% over the prior 24 hours.