Paul Mampilly, an American investor and financial guru, has his own unique insight about the cryptocurrency bubble and its imminent crash. According to former hedge fund manager Paul Mampilly, the cryptocurrency bubble is about to burst. Although the prior winner of the prestigious Templeton Foundation investment competition is not able to predict exactly when the cryptocurrency crash is going to occur, Mampilly emphatically states that it is only a matter of time before people lose their money.
In 1999, every investor believed that wealth was the only outcome of an impressive stock market rally. Paul Mampilly remembers that his friend Tess owned technology stock shares that were up more than 1,000 percent. Paul recalls taking a deep breath and telling his friend that her gain was amazing. However, 1999 was the year of a great bubble that was about to explode leaving many investors without any investments.
Major Stocks were About to Decompose
The bubble was composed of major companies with solid reputations. Qualcomm Inc. (Nasdaq: QCOM) was up 2,619 percent. At least a dozen other technology stocks were up 1,000 percent. Another seven stocks were up at least 900 percent. Paul Mampilly reminds investors that these stocks did not represent obscure companies. Instead, the stocks represented major businesses listed in the Nasdaq Composite Index.
Consequently, the fact that Qualcomm and similar stocks rose to such tremendous heights was an obvious indication that the stock market was literally going insane. A huge bubble kept drawing new investors into the market. Little did the newbies realize that they were about to lose their shirts. Mampilly explains that the current cryptocurrency bubble is similar to the 1999 explosion.
Paul Mampilly did Not Lose One Dime in 1999
Paul Mampilly stated that he sold every stock in 1999 before the bubble exploded. He continued to monitor the stock market as stock prices kept going higher. Some of the stocks went up 20, 30 and 50 percent. The incessant stock market greed was becoming part of normal life. At first, Mampilly felt as though he had made a mistake when he sold all his stocks.
Nevertheless, he felt good about his decision when all the stocks tumbled to incredible lows in 2000 and 2001. He was relieved that he did not lose any of his money. Paul Mampilly had warned Tess over and over again that she should sell her shares. She did not listen to his warnings. She kept her shares and bought more shares as the price continued to tumble. Instead of cashing in on her incredible 1,000 percent gain, Tess ended up with a zero balance in her investment account.
Cryptocurrency Represents a Huge Bubble
Everyone who invested in a major cryptocurrency earlier this year has become rich within a few months. Some investors who bought bitcoin earlier this year are now millionaires. Bitcoin is currently valued at more than $19,000. Mampilly believes that bitcoin, Ethereum and similar cryptocurrencies are going to crash.
According to the official chart at Coindesk, people who bought bitcoin cryptocurrency earlier this year paid less than $1,000 per bitcoin. A $10,000 investment is now worth $190,000. The statistics are difficult to believe and hard to avoid, especially for those who did not invest in bitcoin when opportunity knocked at their investment portfolios.
Paul Mampilly has stated that numerous investors have written him emails informing him that his negative emotions regarding bitcoin is due to the fact that he did not buy any cryptocurrencies when he had the chance. According to Paul Mampilly, nothing is further from the truth. His friends expressed the same sentiments to him in 1999 when he said they were going to lose their money. At that time, Tess began to ignore him. She refused to speak with Paul for several months.
The problem with an investment bubble is that investors become emotionally attached to their stock shares or cryptocurrencies. People frequently miss the chance to sell their investments when the prices peak. They continue to look back at the former high prices and wait until the prices go up a second time. Unfortunately, a huge bubble does not wait for anyone. The bubble bursts unexpectedly. By the time the price goes down, investors have lost their fortunes.
Bitcoin is up an astonishing 1,172% in the last 12 months, hitting a high of more than $11,000.
— Paul Mampilly (@Paul_M_Guru) November 30, 2017
A Bubble is Not a Good Investment
Obviously, Paul Mampilly’s former warning to avoid purchasing bitcoin was premature. Even so, he fervently believes that the cryptocurrency bubble is going to crash sometime in the near future. Mampilly points out that the price of bitcoin continues to rise simply because news reports state that bitcoin is rising. Once everyone owns part of the huge bubble, the bubble can no longer contain itself and bursts into tiny fragments. Unhappy investors are then forced to accept the fact that their former impressive gains no longer exist.
Paul Mampilly admits that his investments had been through several bubbles during the past 25 years. He is firmly convinced that the cryptocurrency bubble is going to blow up leaving many investors without any funds. For more than two decades, Mampilly has been an account manager managing millions of dollars for clients.
In addition, Mampilly has managed investment accounts for the Royal Bank of Scotland. He also managed the large Kinetics International hedge fund. Paul Mampilly invested his own money in a company that was in the process of developing a medication for treating muscular dystrophy. He sold his Sarepta Therapeutics shares at an impressive 2,000 percent gain within a year.
Paul Mampilly has been a frequent guest on CNBC, Bloomberg TV and a variety of networks. As the founder of the newsletter Profits Unlimited, Paul Mampilly provides guidance to investors who want to learn about potentially profitable stocks, when to buy stock shares and when to sell their investments. Paul Mampilly is currently the senior editor at Banyan Hill Publishing where he specializes in helping average investors learn how to invest. His Profits Unlimited newsletter helps investors learn helpful investment tips.
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