Skip to content

Stock market chart echoes dot-com bubble; Are your investments safe?

Stock market chart echoes dot-com bubble; Are your investments safe?
Ana Zirojevic

As the famous saying goes, “History never repeats itself, but it does often rhyme,” and recently, the Nasdaq Composite index (NASX) chart has been demonstrating eerily similar movements as around 20 years ago, when the dot-com bubble imploded.

Indeed, the NASX chart shared by the data analytics platform Barchart shows that the index’s current chart patterns mimic those from the turn of the century, specifically the two bottoms, followed by a top, another bottom, another top, and a beginning of a decline, as shown in an X post published on October 26.

Nasdaq Composite chart since late 1990s. Source: Barchart

As the X user Michael Burry Stock Tracker, who keeps track of Michael Burry’s stock portfolio, highlighted when reposting the chart, the comparison of the dot-com bust and today’s stock market was “looking a little spooky,” according to the post shared on October 26. 

What happened in early 2000s

As a reminder, the dot-com bubble was a stock market bubble fueled by highly speculative investments in internet-based businesses during the bull market of 1995 – 2000 that saw a dramatic growth in the value of equity markets, particularly the technology-dominated Nasdaq index.

However, in the late 2000s, investors realized that many of these companies’ business models were not viable, which led to a two-year-long bear market that saw the Nasdaq index plunge over 75%, the majority of dot-com stocks go bust, and trillions of dollars in investment capital disappear.

NASX during dot-com bubble and collapse timeline. Source: Global Entrepreneurship Institute

Echoes of the past

What followed was a period of 15 years before the Nasdaq stock index recovered and retrieved its peak. Considering that the same pattern has been unraveling for the past several years, a question arises as to whether another massive stock market crash could ensue, just like the dot-com bubble.

Earlier this year, legendary investor Michael Burry, a hedge fund manager known as “The Big Short,” who has built a reputation for making predictions about the financial markets, warned about the state of the banking and financial world at the time, pointing out that they were mirroring the dot-com and housing crashes from 2000 and 2008.

At the same time, the chief market strategist at InTheMoneyStocks.com, Gareth Soloway, earlier this year compared the dot-com bubble, not with the stock market or banking but instead with today’s cryptocurrency market, arguing that it could go through the same kind of washout that dot-com companies had gone through at the time.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.