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Stocks will fall more? - YouTube
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hi everyone welcome to today's video so
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let me start today's video by talking
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about a very interesting graphic it
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compares the 2022 Tech crash vis-a-vis
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2000.com crash very important chart so
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take a look so this blue line indicates
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the 2000.com crash and the stocks from
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their top corrected by almost 78 percent
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now this green chart indicates the 2022
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crash and here you can see this blip
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that this has gone down by roughly 15 16
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which is what NASDAQ and S P 500 which
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are the US Stock indices they indicate
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so people are believing that you know
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what from this point the stock market is
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going to correct significantly and
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probably there is another 65 fall that
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can happen from this point this is a
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very scary situation and it gets
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Amplified when you keep on reading these
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news from different outlets now you know
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what that this current crisis is exactly
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like 2000.com bubble this has not been
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covered by just one media house this has
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been covered by numerous media houses so
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naturally you will get scared you will
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sell all your stocks go away to
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Himalayas and start meditating in fact I
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am also going to one of the Hill
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Stations don't worry I will continue to
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shoot videos but on today's video we are
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going to systematically understand with
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data that is the current crisis like the
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2000.com bubble the answer might
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surprise you the answer is both a yes
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and a no very very important that you
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watch the entire video otherwise it
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might confuse you so let us get the
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discussion started and three key points
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about the 2000.com bubble so we will
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study it in historic format that why did
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it originate how did it mature and how
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did it pop so what was the reason for
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that bubble to burst and we will compare
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it to today's circumstances so first key
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point is the origination of the 2000
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bubble and origination of 2022 bubble so
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the 2000.com bubble got formed due to
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three critical reasons the first reason
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was that internet was new it was a new
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technology people did not truly
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understand the potential of the internet
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probably they over bet on this entire
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situation that hey you know what
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internet is going to change everything
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so let's go pour in crazy amount of
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money that brings us to step two that
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there was a massive race to get big the
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VC industry was not completely mature
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and some of the internet companies spent
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approximately 90 percent of their money
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purely on marketing third key reason is
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that these companies grew very very
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quickly just to show you how this makes
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change you need to study the situation
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in 1995 and compare it with their data
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in 2000. in 1995 the tech weight of the
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index was roughly 10 percent it grew up
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to approximately 36 percent which is a
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very fast rise if you compare this
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situation to 2022 so yes even the weight
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of tech companies in the indices all
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across the globe is still very much high
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but that change or that growth has been
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gradual for example in 2016 the weight
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of tech companies was roughly 21 now it
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is roughly 36 so that change has been
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gradual or slow so just to put things in
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context if you take a look at the growth
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of tech stocks in the 2000 bubble Peak
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they grew by roughly 800 percent which
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is a fairly big rise currently in 2022
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this growth has been roughly 300 so even
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the growth in 2022 has not been that
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high so to say so just to quickly
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summarize the situation in 2022 yes the
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valuations of several tech companies
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have been extremely high for example
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Netflix the valuations went crazy with
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Tesla the valuations have gone crazy
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with Nika in India the valuations have
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gone crazy with zomato paytm valuations
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have gone crazy but how have they gone
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as crazy as they were in the year 2000
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the answer is no the reason for that is
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that the VC system or the VC ecosystem
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right now which puts in a lot of money
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into these startups that has matured so
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they also understand because at the end
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of the day VCS need to make money and
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they would not be unnecessarily betting
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things one after the other and keep
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pumping the ecosystem they would do it
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only up to a certain point so they did
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learn from their mistake but have they
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learned completely probably not I don't
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know but the situation is not as scary
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as it was in 2000 that is a simple point
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that I'm trying to establish now comes
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the third key part that yes the growth
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has been accelerated even in today's
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ecosystem but not at the rate at which
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it existed in the year 2000 so remember
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that number 800 percent growth in 2000
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Visa was 300 growth now which brings us
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to part two of the story that if you
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look at the maturing of this bubble then
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what is the difference between 2000 and
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in 2022 so if you study the 2000 data
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the maturing of the bubble took place
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because a lot of VC money poured into
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the ecosystem According to some articles
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it has been clearly stated that record
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amount of capital started flowing in
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NASDAQ in 1997. by 1999 39 of VC
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investment were going to internet
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companies that year most of the 457 were
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related to internet companies followed
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by 91 in the first quarter of 2000 alone
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so in the total bubble period 471 ipus
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were launched which were Tech oriented
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which is a fairly big number given the
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year 2000 especially when internet as a
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technology had not been matured now
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something similar had happened in 2022
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that you must have invested a lot of
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money in zomato paytm naika bunch of
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other different IPOs and most of these
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tech companies IPOs were loss making
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was it a bad sign probably because many
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of these IPOs were overvalued no doubt
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about that but as a system did it impact
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all the type of tech companies that
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exist at this point the answer is
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absolutely not the primary reason for
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that is that in 2022 the internet-based
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companies are not immature anymore if
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you consider the history of Apple Google
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even something like Netflix that has
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fallen a lot these are fairly older
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companies in 2000 or during the 2000.com
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bubble these companies were fairly new
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so that is one of the key differences
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that you need to understand but yes when
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it comes to New Age companies for
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example Nica which was at one point in
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time trading at a PE of 1300 that was
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those are like crazy valuations I myself
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made videos that you know what please do
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not invest in IPO of zomato paytm naika
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all that stuff those videos are still
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online you can go and watch it so these
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type of new age internet companies they
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have gotten hit very badly and it is
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reflecting in their stock price but when
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it comes to mature companies the hit has
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not been that significant and the most
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important point that the chances of
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something like Amazon recovering from
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this point is much higher than the
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chances of something like paytm
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recovering from this point and making
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its previous high so this is the key
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difference that you need to keep in mind
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that in the.com bubble the companies
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were not mature the valuations that they
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received almost the entire Tech
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landscape received like crazy
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evaluations that is not the situation
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right now yes things can be overvalued
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but in 2022 the extent of that
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overvaluation is not that high to begin
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with now this point can be further
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understood by looking at that how did
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the.com Bubble Burst and how did the
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2022 Bubble Burst so let us take a very
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quick look if you study the.com crash
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what you would notice is that during
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that time there were tech companies like
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Cisco Oracle Intel which were slightly
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more mature businesses they somewhat
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survived the crash very few new age
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internet companies survived and many of
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these internet-based companies were just
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fluff companies and they completely
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evaporated now this has been captured by
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the fact by a term called as upstart dot
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com companies so these were New Age
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fluffy companies that were trying to woo
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investors in they were the ones that
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went back up no doubt about that that
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pop-up hit the other companies too but
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many of those companies came back which
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I will talk about subsequently on the
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video but what has led to the pop-up of
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the 2022 bubble so there are four
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specific reasons at play the first and
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foremost is the covet situation that the
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2022 bubble is not a tech bubble per se
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the.com bubble was a purely Tech bubble
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it was an internal Tech bubble 2022 is
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not a tech bubble it started with the
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covet crash or the covet crashing the
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economy so to say then it got escalated
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with Russia Ukraine prices then it got
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escalated due to the supply chain
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disruptions then it got escalated due to
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the inflation problems and now the feds
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are jacking up the interest rate and
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they are trying to bring the inflation
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down and as a result the growth is
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slowing down so this is a major
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difference between the.com bubble and
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the 2022 bubble that the.com bubble was
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an internal Tech bubble the 2022 popping
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of the bubble has happened due to
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external reasons so this is a very very
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important difference to keep in mind so
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what is the entire summary that do I
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think that the 2022 stock market is
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going to crash by another 50 I would say
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absolutely not it might crash by a few
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more percentage no doubt about that but
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I can almost guarantee this to you that
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if the world stops in terms of its
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growth the feds are going to pump up the
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money again and the markets are going to
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go up so please be assured that you
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can't fight the battle against fed they
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are going to pump up the market if the
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growth slows down so there is no way
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that we are going to fall by 50 from
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this point and there are very little
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similarities between the.com crash and
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the 2022 crash the 2022 crash is
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slightly more mature the tech industry
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is slightly mature it is happening due
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to external reasons and this is a
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slightly more mature technology that we
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are talking about now this might lead to
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a very interesting conversation that
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yakshat I've been hearing all this video
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all this talk this reminds me of some
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things which starts Red Sea and ends
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with o and in the middle we have ripped
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so we are talking about crypto so
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the.com bubble does it resemble the
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crypto bubble the answer is yes that the
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crypto right now resembles the 2000.com
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bust no doubt about that I am not sugar
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coating it now you would say and ask me
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a counter question that hey you know
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what you have been talking about crypto
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so positively then suddenly you are
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changing your tune now are you going to
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sell all your cryptos the answer is no
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and I will explain you the logic behind
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it also a great place to start would be
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to analyze a company like Amazon and I
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will tell you also why am I picking
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Amazon as a case study and then I will
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relate this to crypto market so let me
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quickly talk about the story of Amazon
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in a very brief manner so Amazon started
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roughly in 94.95 it got listed somewhere
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around 97 and its listing price was
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roughly 1.7 then its stock price stayed
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almost like seven eight dollars and
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under 10 till like 1998 and then
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suddenly 1999 due to the.com Bubble
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gaining strength its stock price rows to
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approximately hundred dollars so please
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remember there was a 10x gain on the
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Amazon share in that time period then
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what happened was that the.com Bubble
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Burst and the Amazon stock started
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coming down in fact it came down all the
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way to roughly five and a half six
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dollars so that is how big the Amazon
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fall was just to help you set the
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context during the rise of the.com
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bubble Amazon Group by roughly 10x in a
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period of a few months then it fell by
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almost 95 percent within a matter of a
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few months now very dangerous situation
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why did that happen because Amazon as a
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business was not tested out it was new
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it was leveraging internet and it had
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great potential and therefore now if you
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study the graph beyond that you can
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clearly see that it has become one of
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the leading companies in the world and
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the stock price has given massive
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returns now you would say that okay why
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are you comparing like Amazon to a
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crypto technology to three reasons so
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first and foremost that Amazon
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experimented with what idea it
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experimented with the internet based
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business it was new the bubble was there
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now what is cryptos about so crypto is
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an ecosystem I have been saying
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constantly on my channel that 99 cryptos
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are bad in fact I will link a video that
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I had made a few months back about
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revealing my portfolio so please go and
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watch it and please watch the crypto
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section also which cryptos have I been
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speaking about so according to me 99
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cryptos are bad now what is the reason
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for that the reason for that is fairly
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simple that many of the cryptocurrencies
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are decentralized in nature now
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decentralized in nature means that it is
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like a computer code that anyone can
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come design their own piece of software
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and call it a coin or call it an nft or
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call it whatever they like to call it
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because of the decentralized nature
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cryptos are easy to generate also so
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therefore almost 99 cryptos are bad if
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you are picking bad cryptos of course
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you are going to lose your money so this
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brings us to the second point and the
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first point was that 99 cryptos are bad
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second Point means that one person
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cryptos are good now I will get a lot of
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heat for saying that some cryptos are
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good because lot of you will point to
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the the example that he akshat Bitcoin
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has fallen by roughly 50 in the last six
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months yes check how much has Amazon
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fallen in the last six months it has
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also Fallen by 40 check how much has
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Facebook fallen in the last six months
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buy more than Bitcoin the bottom line is
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that all the tech stocks have fallen and
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consider Bitcoin to be a mature Tech
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stock from that perspective it has
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already proven itself to be a stable
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cryptocurrency but at the end of the day
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you need to compare Bitcoin with tech
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stocks if you start comparing Bitcoin
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with value stocks of course you are
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going to get random data so now comes
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the natural question that okay we want
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to invest in these top one percent
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cryptos are there any suggestions now
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this is not an investment advice but
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I'll give you some basic Viewpoint here
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so that you get more clarity and not get
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swayed Away by analysis like that that
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you know what Bitcoin has fallen by 50
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yes because it is a tech stock if
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companies like Amazon are falling by 40
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then of course something like Bitcoin is
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going to fall because you need to
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compare it with a tech stock so anyways
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coming back to the topic if you are
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looking to invest in cryptos then please
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study the different ecosystem system of
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cryptos right now in India The Narrative
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is that all the cryptocurrencies are the
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same and there is just one thing which
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is called as a cryptocurrency so this
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understanding is completely flawed it is
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similar to saying that you know what
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there is like just one thing called as
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stock no there are 100 different types
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of stocks small cap penny stocks even in
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small cap there can be different
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categories so on and so forth so you
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can't compare something like Reliance
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com stock with something like HDFC Bank
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stock right so that would not be the
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correct comparison so similarly you need
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to first and foremost understand the
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ecosystem of cryptocurrencies so it
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could be nfts it could be layer 1
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blockchain it could be D5 projects just
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categorize it read a little bit about it
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Google it so that is literally step one
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number two is please pick winners in
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this space for example you know for a
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fact that Bitcoin and ethereum are two
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leading blockchains please go and read
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about it similarly look at the major
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nfts that are gaining prominence
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understand more about it third point is
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please understand the utility of a
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particular cryptocurrency let me address
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this point also by giving you specific
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example and this question goes out to
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all crypto critic so let me pick the
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example of gaming based nft projects I
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will tell you one problem which
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currently exists in the current video
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gaming system and you tell me a better
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solution without going to crypto based
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nft solution so the problem is that for
[883]
example when you play something like
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FIFA or when you play God of War you go
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you exchange your US dollar or INR into
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that particular ecosystem for example
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you will buy a sword from God of War now
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that money is stuck is there a way for
[896]
you to get that money back through God
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of War the answer is absolutely not you
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can't sell that sword in that ecosystem
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and it is a problem now what is the
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utility that with play to earn games you
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can go and sell that sword which is in a
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form of an nft onto a platform like
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openc which is pretty much like an
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Amazon for nft now you tell me how is
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this not a utility now similarly I am
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happy to point out at least hundreds
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such utilities of different
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cryptocurrency nfts this is not a push
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from my side to make you invest in
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cryptocurrencies but at least don't say
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that hey this has no utility give me a
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better answer if you have one similarly
[932]
let me point to another utility that
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when I'm transferring money through my
[935]
HDFC bank account to a friend in the US
[938]
I have to pay so much commission there
[940]
is at least a three percent commission
[941]
in terms of the exchange rate now I'm
[944]
losing that commission unnecessarily if
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there is a way for me to go to the
[948]
crypto world and save that commission is
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that not a utility this is precisely
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what the utility is now how do you check
[953]
this utility you can go and read
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something as the white paper right so I
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will link some of the white papers in
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the description box of some of the
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leading cryptocurrencies and nft
[963]
projects you go read it and if you see
[965]
value in it then it might give you an
[967]
opportunity to explore the next Amazon
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because the next Amazon might not come
[971]
from the stock market it might actually
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come from the crypto Market because
[975]
Amazon navigated a new technology called
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as the internet and right now there is a
[979]
new technology called AS blockchain
[981]
Slash cryptocurrencies and whichever
[983]
good cryptocurrencies are able to
[985]
successfully navigate this tumultuous
[987]
technology they are likely to become the
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next Amazon I hope you see this analysis
[991]
with the rational Viewpoint and I hope
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you enjoyed the video please share it
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with your friends and like and comment
[995]
and I will see you tomorrow
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