The dot-com bubble (also known as the dot-com boom, the tech bubble, and the Internet bubble) was a stock market bubble caused by excessive speculation of Internet-related companies in the late 1990s, a period of massive growth in the use and adoption of the Internet.

What was the impact of the dot-com bubble burst?

The dotcom bubble crash was a shock event that resulted in massive sell-offs of stocks, as demand waned and restrictions on venture financing increased the rate of the downturn. The crash also resulted in massive layoffs in the technology sector, as it was inevitable.

What caused the 2000 tech bubble to burst?

The dotcom crash was triggered by the rise and fall of technology stocks. The growth of the Internet created a buzz among investors, who were quick to pour money into startup companies. These companies were able to raise enough money to go public without a business plan, product, or track record of profits.

What happens when a bubble bursts?

During a bubble, investors continue to bid-up the price of an asset beyond any real, sustainable value. Eventually, the bubble “bursts” when prices crash, demand falls, and the outcome is often reduced business and household spending and a potential decline in the economy.

Is there a bubble in the tech market?

Alan Patrick, co-founder of analytics firm DataSwarm, has seen his share of tech bubbles and, while he sees plenty of “froth” at the moment, he doesn’t yet consider this is a bubble about to pop. Even today, with tech stock prices still so high, he said, we may only be at the “foothill of bubble phase”.

How did the tech bubble lead to a bust?

Once a boom occurs (tech bubble), a bust happens when interest rates are raised (2001 downturn). In order to get the country of the downturn, another boom is created (housing bubble), which also leads to a bust (2008 crisis). The main issue is that Central Bankers have not learned their lesson and they continue with the same policy.

How did the dotcom bubble burst in the 1990s?

How the Dotcom Bubble Burst. The 1990s was a period of rapid technological advancement in many areas, but it was the commercialization of the internet that led to the greatest expansion of capital growth the country had ever seen.

What was the impact of the dot com bubble?

The successful dot-coms of the late ‘90s and early ‘00s had a few things in common: they all vowed to “change the world”, had crazy-high valuations, and were wildly unprofitable. Here’s a look at one company’s rapid rise and fall — and the bubble’s lasting impact, from internet historian Brian McCullough.