The striking similarities between the beginnings of the crypto market and those of the stock market

The crypto market is often seen as a radically disruptive newcomer in finance. Yet on closer inspection, its tumultuous beginnings are in many ways reminiscent of the early days of stock markets. These similarities deserve attention. A look back at the parallels between these two universes in terms of volatility, technological evolution and maturation.

Initially uncontrolled volatility and crashes

When the first stock markets were born in the 18th century, speculation and volatility reigned. Speculative bubbles and crashes were frequent, the result of an absence of regulation.

Similarly, the crypto market has experienced extreme volatility over the past decade. The price of bitcoin rose from less than $1,000 to nearly $20,000 in 2017, before collapsing the following year. A speculative chaos comparable to the early days of the stock market.

Stock market or crypto, rapid technological evolution in both cases

Another parallel: the dazzling technological transformation steps. Innovations have continued at a breakneck pace for both stocks and cryptocurrencies.

On the stock market side, progress has been gradual, with the introduction of electronic transactions or benchmark indices. In crypto, disruptive technologies such as blockchain itself or smart contracts have emerged in just a few years.

Towards mass adoption and increased regulation

Finally, we see the same path towards mainstream adoption and a strengthened regulatory framework. Stocks have moved from the restricted circles of finance to mainstream investing. Same for crypto with millions of users today.

As for regulation, it has tightened after the speculative excesses both on the stock market and in crypto. We find the same objective: to restore confidence by supervising practices.

Although different, the chaotic beginnings of the crypto market strongly echo the early history of the stock market. This comparison sheds light on crypto’s likely trajectory toward greater maturity.

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