· Technology · 4 min read
When AI and Crypto Bubble Bursts
It's not a question of if the bubble will burst — it's a question of when. The fallout could dwarf the dot-com crash. In this post I discuss what could happen and why.
The tech world loves a good buzzword, and right now, AI (artificial intelligence) and cryptocurrency are the biggest ones. These technologies promise to change everything — from the way we work to how we handle money. Investors are pouring billions into AI startups and crypto projects, convinced that they’re riding the wave of the future.
But what if it all goes wrong? History has shown us that when bubbles burst, they can leave behind massive damage. Think about the dot-com crash in the early 2000s. At the time, it seemed like the biggest financial disaster in the tech world. But when the AI and crypto bubbles pop, the fallout could be even worse.
Here’s why.
Bigger Money, Bigger Risk
The dot-com bubble saw investors throwing money at internet companies, even ones with no solid business plan. When those companies failed, $5 trillion vanished from the stock market.
Now, compare that to AI and crypto. These industries aren’t just pulling in billions — they’re pulling in trillions. The amount of money involved in AI research, crypto projects, and related startups is staggering. When this bubble bursts, the financial loss could make the dot-com crash look small.
Real Tech, Unreal Expectations
AI is real, and it’s powerful. Tools like ChatGPT and self-driving cars show what’s possible. But here’s the problem: many companies claim their AI will do things it probably won’t. Investors are betting on AI solving every problem, from curing diseases to creating fully autonomous robots.
The truth is, AI has limits. It’s great at some tasks, but it’s far from perfect. When companies fail to deliver on their promises, trust will collapse. Investors might realize they’ve been chasing a dream that’s still decades away.
The Wild West of Finance
Cryptocurrency promised to change the way we use money. But instead of stability, the crypto world is full of scams, failed projects, and extreme volatility. While some coins like Bitcoin have gained mainstream attention, thousands of other cryptocurrencies have become worthless overnight.
People are investing in crypto not because they believe in its future, but because they hope to get rich quick. That’s the same mindset that fueled the dot-com bubble. When confidence in crypto fades, it could all come crashing down, taking millions of people’s money with it.
Interconnected Systems — A Chain Reaction
The tech industry today is much more connected than it was during the dot-com era. Many companies now rely on AI for their operations or use blockchain technology (the foundation of crypto). If these industries collapse, the impact will ripple across the global economy.
Banks, governments, and even small businesses could feel the shock. The internet bubble mostly hurt tech companies and their investors. An AI and crypto crash could hit every sector.
Too Many Players, Too Few Winners
During the dot-com boom, everyone wanted a piece of the internet pie. The same is happening now with AI and crypto. Startups are popping up everywhere, but not all of them will survive.
In fact, many AI and crypto companies are just jumping on the trend to attract investors. They promise big things but don’t have the technology or expertise to back it up. When the bubble bursts, the weakest companies will fail first, but even the strong ones might not survive the fallout.
What Can We Learn?
The dot-com crash taught us that not every new technology is a guaranteed success. It also reminded us that hype can blind people to reality. With AI and crypto, the stakes are even higher.
If you’re investing in these industries, be cautious. Look for companies with real value and avoid the ones that sound too good to be true. And remember: every bubble bursts eventually.
The Bottom Line
AI and crypto are exciting and revolutionary, but they’re also overhyped and overfunded. When the reality doesn’t match the expectations, the collapse could make the dot-com crash seem small by comparison.
It’s not a question of if the bubble will burst — it’s a question of when. And when it does, the fallout could reshape the financial and tech worlds for decades to come.
