Doesn’t ring a bell? Well, imagine yourself standing at the checkout counter at your local H&M store, and buying a pair of socks or a hat just because the waiting got you bored.
The phrase ‘irrational exuberance’ first came into being when former Federal Reserve chairman Alan Greenspan elucidated upon the fact that stocks of internet startups had started getting too hot and attributed this trend to investors acting in an overly optimistic manner.
It was a prosperous and optimistic decade; well for the most part, for it ended with the dot com bubble burst.
The Nasdaq peaked by reaching 5,048 in the middle of March 2000, falling to 3,321 in April and then finally bottoming out at 1,114 in October 2002.
The exuberance in markets can also be attributed to the flood of liquidity across different geographies arising out of an active pursuit of unmatched fiscal and monetary stimuli.
There are very obvious reasons for the same, namely the sheer similarity between the emergence of early applications of disruptive communication technology and the massively volatile market that emerged around the blockchain ecosystem.
A person invests in the crypto market not because of his/her belief in its fundamentals, but out of an inherent FOMO on being a part of a scheme that is supposed to make you rich quickly.