Why the Crypto Bear Market Is Like the Internet Market in the 90’s

Nobody likes a bear market, particularly when it involves a volatile asset class like cryptocurrencies. These bear markets tend to be more vicious because crypto is a relatively new investment category (less than 10 years old). As an investor, the best course of action is to remain patient while the market completes its cycle.

A Bear Market Isn’t All Bad

Actually, a bear market is quite healthy for any type of investment vehicle in the long run. It’s never good for an asset class to move dramatically higher in a short period of time because the market will turn into a speculative bubble, the likes of which we saw towards the end of 2017.

Eventually, the bubble will burst and it could take years to repair the damage. The best way to avoid a bigger bubble is to have an occasional bear market along the way, which is exactly what DGTX has experienced during the past few weeks.

Of course, the number one question among investors is “When will the bear market end?” Obviously, it’s impossible to answer this question with any degree of accuracy. However, it might be helpful to review a bear market from a similar asset class. This could give us some idea of what to expect concerning DGTX.

Comparing Today’s Crypto Bear Market to the Internet Bear Market

In many ways, today’s cryptocurrency environment is very similar to the dot-com mania and the Internet boom from the late-1990s. The internet was an exciting new frontier with unlimited potential, very similar to today’s enthusiasm with crypto and blockchain technology.

Throughout the time period from 1995 through 1999, several new internet companies and technology companies appeared on the scene, trying to capture a piece of the new “gold rush.”

Out of all the companies that made their debut during this five-year window, the firm that had the greatest impact was Amazon. Without question, Amazon was the leader of the dot-com boom in terms of innovation and product development.

Even though Amazon (AMZN) became an incredibly successful company, it suffered through a few nasty bear markets (very similar to the current crypto bear market).

Check out the below two-year chart of AMZN. As you can see, AMZN reached a peak in December 1999. The company struggled for the next two years before finally making an important bottom in October 2001.


Chart 1: AMZN 2-year Chart

Many Wall Street analysts and investment professionals predicted that Amazon would never recover. They claimed that online shopping was nothing more than a fad or a “flash in the pan.” These analysts believed that all internet stores like Amazon would completely disappear within the next few years.

Founder Jeff Bezos and his team completely ignored the FUD (fear, uncertainty, and doubt). Instead, they focused on providing their customers with innovative new products and services. Amazon became the industry leader in regard to customer service and product innovation.

Over the course of the next decade, AMZN stock exploded to the upside. From October 2001 through October 2011, AMZN increased 4,377% (see chart 2 below).


Chart 2: AMZN Bull Market Chart

Wall Street analysts and investment professionals completely missed this golden opportunity.

There Will Be Bear Markets Along the Way

The cryptocurrency explosion during the past two years is almost identical to what we experienced with the internet boom from the late-1990s. Today, cryptocurrency is becoming a completely new asset class as traders and investors embrace this new technology.

However, the “cryptocurrency movement” will certainly have its share of difficult times. There will be bear markets along the way.

Digitex Is an Industry Leader

Within the cryptocurrency universe, Digitex Futures is quietly establishing itself as an industry leader. Cryptocurrency futures trading has enjoyed a tremendous amount of growth throughout 2018. This niche industry is just getting started in terms of growth potential. And Digitex will be on the leading edge of this new frontier.

The most important attribute of Digitex is that the futures exchange is offering commission-free trading. Eventually, other exchanges will surely be forced to follow Digitex by offering their own version of fee-free trading.

Regardless of how many exchanges convert to commission-free trading, Digitex will always be regarded as the industry leader because it was the first futures exchange that was bold enough to adopt this type of fee structure.

When this current crypto bear market comes to an end, a new bull market will rise from the ashes. Most likely, firms such as Digitex will lead us out of the bear market because of the company’s unique features and characteristics.

History has shown us that traders and investors are usually nervous as a new bull market slowly begins. They are nervous because they still remember the pain from the recent bear market.

Consequently, the trading community will migrate toward firms that are recognized as industry leaders. Digitex is very similar to Amazon in terms of product innovation, and being a leader within its respective industry.

Amazon led the way out of the internet bear market during the early-2000s. There’s a good chance that Digitex will lead the way out of the crypto bear market as more customers continue to migrate toward cryptocurrency futures trading.

Of course, nobody has enjoyed watching the price of DGTX decline throughout the month of November. However, despite the recent decline, we must remember that DGTX is still up 317% since its ICO on January 15, at the time of writing. This represents an incredible rate of return in less than 11 months! The future definitely looks bright for DGTX and exchange.

Personal Observations

Based on my three decades of trading experience, I’ve never seen a bear market last indefinitely. All bear markets eventually reach a point of capitulation. After all the traders have finally “thrown in the towel” by liquidating their positions, a new bull market is born. The current bear market in cryptocurrencies will be no different.

Please review my article from October 29. I mentioned that the important support level for DGTX was .0679. Currently, DGTX is trading below .0679. Therefore, the DGTX token has lost its bullish momentum. It could take several weeks to recapture the bullish momentum. Remember after all that successful investing requires patience and discipline.

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.