Maria Irene
Once upon a time in the late ’90s, a perfect blend of low interest rates and breakthrough technology created a potent brew that no one could resist. Investors poured funds into start-ups with giddy abandon, as though sprinkling the internet over traditional businesses was the secret recipe for success. It was a time where the phrase “just add internet to it” was the mantra of the era.
Fast forward a couple of decades, and it seems like history might be rhyming with itself in the world of crypto. The call to “take x but make it decentralized” or “take x but add tokens” resonates eerily with those days of yore, and the echoes of unsustainable business models and overfunding are hard to ignore.
But what can we learn from the frothy days of the Dotcom bubble, and how does it apply to the current state of crypto?
The Dotcom bubble, once burst, left behind a strange landscape. The very speculative investment in physical infrastructure that led to the bubble also paved the way for cheap and accessible fast internet. The very capacity that had seemed excessive became the groundwork for the technology revolution that followed.
And yet, not all that glittered turned out to be gold. Some pre-bubble categories and companies vanished without a trace, and a vast majority of those “just add internet” businesses crumbled. Even the best survivors took 5-15 years for their market caps to reach all-time highs again.
So where does that leave crypto? The parallels are there, and the risk of a bubble bursting looms large. But just as the Dotcom era eventually led to true innovation and lasting businesses, there may well be a silver lining to the crypto cloud.
The key is discerning the difference between real innovation and fleeting hype. If history has taught us anything, it’s that the real winners are those with sustainable business models, strong leadership, and true value. The road to recovery, should the bubble burst, may be long, but it won’t be barren.
Like a masterfully brewed cup of tea, the blend of excitement and risk in both the Dotcom and crypto realms offers a complex flavor profile. Will we savor the taste of success or choke on the dregs of failure? Only time will tell, but one thing is sure: We’ve been down this road before, and the lessons of the past are there for the taking.
Enjoy the brew, but beware the bubbles!
Article inspired by a post by Vibhu, founder of Drip Haus
