Bubble is a term that has been thrown around loosely in the financial media over the last few years to describe everything from the housing market to equities to used cars.
With the Federal Reserve pumping trillions into the economy and keeping the short-term federal funds rate low in response to the COVID-19 crisis, real estate and stock prices have skyrocketed.
While it’s true that stock market valuations have become stretched by traditional metrics and that the real estate market has arguably never been hotter, it’s hard to say whether or not these assets are actually in a bubble or if the financial landscape has simply changed.
Then you have cryptocurrencies – a burgeoning asset class that created life-changing wealth for early investors during the pandemic.
Digital currencies like bitcoin and ethereum, the two largest cryptocurrencies by market value, have had meteoric ascents since 2019 that has left some under the impression that the entire crypto market is a massive speculative bubble.
One reason people likely piled into cryptocurrencies during the pandemic is because they…