[When Nasdaq was once a 'casino']
On August 9, 1995, Netscape went public on Nasdaq. This company, which had been established for only 16 months and had never made a profit, saw its stock price soar from $28 to $75 in an instant at opening and finally closed at $58.
At that time, the (Wall Street Journal) commented: 'Any rational investor would think this is crazy.' But it was this 'madness' that marked the beginning of the internet revolution.
1.
The chaos in today's cryptocurrency market is strikingly similar to the early scenes of Nasdaq 25 years ago.
In 1998, Amazon's stock price rose from $6 to $60 within a year, and then fell back to $6 in 2001. The mainstream opinion at the time was: 'E-commerce is a joke.'
Today, those who exited when Amazon hit rock bottom are now regretting as they watch its stock price soar to over a thousand dollars.
2.
Reflecting on the market characteristics during the tech stock bubble:
- Daily volatility exceeded 5%
- 90% of companies do not have stable profits
- Regulatory policies change frequently
- Short-selling reports are everywhere
These characteristics are remarkably similar to today’s cryptocurrency market.
3.
My predecessor Mr. Wang made a life-changing decision during the tech stock crash in 2000: he not only did not sell Microsoft shares but also invested all of his year-end bonus.
His reasoning is simple: "The Windows system is still running on hundreds of millions of computers, and this company's value will not disappear due to a drop in stock price."
Today, the Microsoft shares he holds have appreciated over 20 times.
4.
In 2002, Tencent's stock price once fell to 0.6 HKD in the Hong Kong stock market. At that time, the mainstream view was: "This small company will never find a profitable model."
Twenty years from now, those who bought at the lowest point and held on have gained over 1,000 times the return.
This confirms a truth: true value only emerges after the noise has settled.
5.
Observing the journey of Nasdaq from chaos to maturity, we discover three phases:
- Barbaric growth period (1971-1990): loose regulation, mixed fortunes
- Bubble burst period (2000-2002): market clearing, value returning
- Regulatory development phase (2003 to present): institutions enter, ecosystem improves
Today’s cryptocurrency market is in a transition from the first to the second phase.
6.
Data shows that after the dot-com bubble burst:
- The number of publicly listed companies on Nasdaq decreased from nearly 5,000 in 2000 to 3,000 in 2003
- But the surviving companies have an average increase of over 800%
- The top 10% of quality companies created 95% of the entire market's value
This indicates the future development direction of the cryptocurrency market: quality projects will eventually stand out.
7.
Smart investors are drawing on stock market experiences to do three things in the cryptocurrency market:
- Focus on the actual users and revenue of the project
- Value the long-term building capacity of the team
- Accumulate positions in batches during market panic
It's like panning for gold in sand—the important thing is not the quantity of sand, but the quality of the gold.
8.
Wall Street legend Peter Lynch once said: "The best investment opportunities are right around you, but most people don't see them."
In the internet era, this opportunity was Amazon;
In the mobile internet era, this opportunity was Apple;
In the digital age, this opportunity may be cryptocurrency.
9.
Looking back at history, every technological revolution has been accompanied by madness and reason in the capital markets:
- The railway stock bubble filtered out the real transportation giants
- The dot-com bubble nurtured today’s tech giants
- The cryptocurrency bubble is shaping the future financial infrastructure
The market never mistreats those investors who remain clear-headed amid chaos and see value in panic. While others are anxious about short-term fluctuations, the true wise ones have already laid out plans for the next decade.
Remember, the chaos in today’s cryptocurrency market is precisely the troubles of Nasdaq during its youth 25 years ago.
