A COMPARATIVE STUDY ON EPISODES OF FINANCIAL TURMOIL: INSIGHTS FROM THE DOTCOM BUBBLE, 2008 CRISIS, AND CRYPTOCURRENCY ERA

Abstract

This paper examines the recurring dynamics of financial crises through a comparative case study of the Dotcom bubble, the 2008 global financial crisis, and the ongoing cryptocurrency era. The objective is to investigate whether cryptocurrencies represent a genuine financial revolution or a repetition of past speculative manias. Using a qualitative methodology, the study applies a behavioral finance framework to analyse biases such as herding, overconfidence, and FOMO, and combines this with the evaluation of market data, including IPO trends, interest rates, and volatility indices.

The results reveal strong equivalents across all three cycles. In each case, investor sentiment amplified volatility, and speculative assets obscured true risk. Weak regulation left markets vulnerable to collapse. Today’s ICOs are a reflection of IPOs in the Dotcom bubble, meanwhile the regulatory faults in 2008 find similarities in decentralized finance (DeFi). Moreover, the evidence challenges the Efficient Market Hypothesis, which markets illustrate collective perceptions instead of objective fundamentals.  The findings suggest that financial markets repeat inefficiencies in new forms. Cryptocurrencies risk becoming another phase in the history of financial instability without coordinated regulation, investor education, and macroprudential monitoring.