bubble

An estimated half a trillion dollars was wiped out from the financial markets this week, as some of the biggest tech companies, including Nvidia, Microsoft, and Palantir Technologies saw a temporary but sizeable drop in their share prices on Tuesday. It may have been just a short-lived correction, but experts warn of mounting signs of a financial market crash, which could cost several times this amount.

With dependence on tech and AI growing, critics argue that betting on these profits is a gamble, stressing that the future remains uncertain.

Singapore’s central bank joined a global chorus of warnings from the IMF, Fed Chair Jerome Powell, and Andrew Bailey about overvalued stocks.

The Monetary Authority of Singapore said on Wednesday that such a trend is fuelled by “optimism in AI’s ability to generate sufficient future returns”, which could trigger sharp corrections in the broader stock market.

Goldman Sachs and Morgan Stanley predict a 10–20% decline in equities over the next one to two years, their CEOs told the Global Financial Leaders’ Investment Summit in Hong Kong, CNBC reported.

Experts interviewed by Euronews Business also agree that a sizeable correction could be on the way.

In a worst-case scenario, a market crash could wipe out trillions of dollars from the financial markets.

According to Mathieu Savary, chief European strategist at BCA Research, Big Tech companies, including Nvidia and Alphabet, would cause a $4.4 trillion (€3.8tn) market wipeout if they were to lose just 20% of their stock value.

“If they go down 50%, you’re talking about an $11tr (€9.6tr) haircut,” he said.

AI rally: Bubble or boom?

The US stock market has defied expectations this year. The S&P 500 is up nearly 20% over the past 12 months, despite geopolitical tensions and global trade uncertainty driven by Washington’s tariff policies. Gains have been strongest in tech, buoyed by optimism over future AI profits.

While Big Tech continues to deliver, with multibillion-dollar AI investments and massive infrastructure buildouts now routine, concerns are growing over a slowing US economy, compounded by limited data during the government shutdown. Once fresh figures emerge, they could rattle investors.

AI enthusiasm is most evident in Nvidia’s extraordinary stock gains and soaring valuation. The company is central to the tech revolution as its graphics processing units (GPUs) are essential for AI computing.

Nvidia’s shares have surged over 3,000% since early 2020, recently making it the world’s most valuable public company. Between July and October alone, it gained $1tr (€870bn) in market capitalisation — roughly equal to Switzerland’s annual GDP. Its stock trades at around 45 times projected earnings for the current fiscal year.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Much of this growth is backed by real financial progress, and despite the massive nominal increase in value, relative valuations don’t look overstretched.”

Analysts debate whether the current market mirrors the dot-com bubble of 2000. Nathan notes that many tech companies that failed back then never reached profitability, unlike today’s giants, which generate strong revenues and profits, with robust demand for their products.

Ben Barringer, global head of technology research at Quilter Cheviot, added: “With governments investing heavily in AI infrastructure and rate cuts likely on the horizon, the sector has solid foundations. It is an expensive market, but not necessarily a screaming bubble. Momentum is hard to sustain, and not every company will thrive.”

BCA Research sees a bubble forming, though not set to burst immediately. Chief European strategist Mathieu Savary said such bubbles historically peak when firms begin relying on external financing for large projects.

Investments in assets for future growth, or capital expenditures, as a share of operating cash flow, have jumped from 35% to 70% for hyperscalers, according to Savary. Hyperscalers are tech firms such as Microsoft, Google, and Meta that run massive cloud computing networks.

“The share of operating earnings is likely to move above 100% before we hit the peak,” Savary added. This means that they may soon be investing more than they earn from operations.

Recent examples of Big Tech firms turning to external financing for such moves include Meta’s Hyperion project with Blue Owl Capital and Alphabet’s €3 billion bond issue for AI and cloud expansion.

While AI investment growth is hard to sustain, Quilter’s Barringer told Euronews: “If CapEx starts to moderate later this year, markets may start to get nervous.”

Other factors to watch include return on invested capital and rising yields and inflation pressures, which could signal a higher cost of capital and a bubble approaching its end.

“But we’re not there yet,” said Savary.

Further concerns and how to hedge against market turbulence

Even as tech companies ride the AI wave, inflated expectations for future profits may prove difficult to meet.

“The sceptics’ main problem may not be with AI’s potential itself, but with the valuations investors are paying for that potential and the speed at which they expect it to materialise,” said AJ Bell investment director Russ Mould.

A recent report by BCA reflects the mounting reasons to question the AI narrative, but the technology “remains a potent force”, said the group.

If investor optimism does slow, “a sharp correction in tech could still have ripple effects across broader markets, given the sector’s dominant weight in global indices,” Barringer said. He added that other regions and asset classes, such as bonds and commodities, would be less directly affected and could provide an important balance during a downturn.

According to Emma Wall, chief investment strategist at Hargreaves Lansdown, “investors should use this opportunity to crystallise impressive gains and diversify their portfolios to include a range of sectors, geographies and asset classes — adding resilience to portfolios. The gold price tipping up is screaming a warning again — a siren that this rally will not last.”

Ferguson, a second-round draft pick from Oregon, made his debut after sitting out the first two preseason games because of a hamstring injury.

Ferguson was quiet the first quarter, but in the second he got a chance to show why the Rams selected him to be the heir apparent to veteran tight end Tyler Higbee.

Lining up in the left slot, the 6-foot-5, 247-pound Ferguson broke toward the sideline and made an over-the-shoulder catch for a 33-yard gain. Ferguson, not realizing he slid out of bounds, got to his feet and ran to the end zone.

“It was a big thing for me to have that first catch and be able to stretch the field a little bit, showcase some vertical speed,” Ferguson said during the television broadcast.

A few plays later, Ferguson lined up in the right slot, caught a short pass and turned it into a 15-yard gain.

That was all coach Sean McVay and his staff needed to see.

“You feel him,” McVay told reporters in Cleveland after the game. “He’s just got a nice pace to his game. Thought it was great to be able to get him out there.”

Ferguson showed he will be a factor in a tight end group that also includes Colby Parkinson and Davis Allen.

It’s been quite the summer for Lakers jealousy, hasn’t it?

For example, in July, Bleacher Report left Kobe Bryant — the fourth-leading scorer in NBA history — off its Top 10 all-time player list. In June, when the Buss family sold the franchise to Mark Walter for a historic $10 billion, Lakers haters immediately took to social media to say which teams were worth more. Now we are in August, and every NBA TV show and podcast has a segment to address the comments Philadelphia 76ers executive Daryl Morey made to the Athletic about the Lakers’ 2020 NBA championship against the Miami Heat:

“Had the Rockets won the title, I absolutely would have celebrated it as legitimate, knowing the immense effort and resilience required.… Yet, everyone I speak to around the league privately agrees that it doesn’t truly hold up as a genuine championship.”

Given the historic circumstances of the COVID-19 pandemic that year, to view that championship as “less than” because teams did not travel during it and fans were not present is akin to discounting NFL championships or World Series titles won during World War II because the rosters were thinner because of enlistments.

Morey suggested that victory should come with an asterisk as if the playoffs during a once-in-a-century global pandemic were not as challenging as in typical years. Different dynamic, yes — but easier? He has since walked his comments back, but you know what they say about genies and bottles. Besides, it’s not as if he’s alone in his Lakers disrespect. There are plenty of fans and former players who are quick to point out what the team did not do in that postseason because they don’t appreciate what that championship required.

Beginning with courage.

It’s been nearly five years since the Lakers won title No. 17 inside the $200-million logistics behemoth referred to as the Bubble, so maybe some of us forgot the details. Infectious disease experts, the Walt Disney World Resort in Orlando, the league office, the players’ union, ESPN and many other corporations all came together during a time when we had far more questions about COVID than answers.

From when NBA play stopped in March 2020 to when play inside the Bubble began that July, the country had lost more than 140,000 people to the disease. When bubble play ended in October, it was above 206,000, and many cities were running out of places to store the dead.

Far too often we forget that fame and fortune do not protect a person from problems or heartache. We forget that being a professional athlete does not protect you from the rest of the shared human experience. All-Star center Karl-Anthony Towns lost his mother to COVID that April and seven other relatives over the course of the pandemic. Towns, who turns 30 in November, was himself hospitalized in early 2021 because of the virus.

You’re not supposed to put an asterisk on a sports championship won during the worst of times. You’re supposed to use an exclamation point to honor the mental and emotional dexterity it took. The months of isolation — away from family and friends, away from the routines that made them the athletes they are. Daily testing to guarantee the safety of other players as well as coaches and administrative staff. And while not having to travel to a hostile arena nullified the “road game” in the playoffs, it also took away “home court” from a Lakers team that had the best record in the Western Conference. A team that had just beat the other two title favorites — the Milwaukee Bucks and the Los Angeles Clippers — less than a week before the world shut down.

One day, Morey is going to look back on his comments about the Lakers title in the Bubble with shame. Not because he’s wrong in reporting the disrespect others in the league have expressed but because he chose to give that rhetoric oxygen. Morey and others have long had such jealousy of the Lakers, but this was the summer they turned petty.

YouTube: @LZGrandersonShow

ADVERTISEMENT

The price of Bitcoin (BTC) is expected to reach a high of $162,353 this year (€139,148), before it settles at around $145,167 (€124,418).

That’s according to UK fintech firm Finder’s latest survey, collecting price predictions from 24 crypto industry specialists.

Within responses, high and low estimates range widely, and the most optimistic predictions expect a peak price of $250,000 this year. The average lowest price prediction sits at $87,618, with some predicting that Bitcoin will fall as low as $70,000.

The cryptocurrency has recently reached $120,000 from just below $100,000 at the end of last year. 

“There are a number of factors increasing demand for Bitcoin, including clearer and more favourable regulations, increased utility such as payments, and changing economic conditions,” crypto exchange Zondacrypto’s CEO, Przemysław Kral, told Euronews.

He added that regulations such as the EU’s MiCA contributed significantly to the recent rally. The Markets in Crypto-Assets Regulation (MiCA) sets uniform EU market rules for crypto-assets. This, coupled with an increased interest from institutional players, largely in the form of exchange-traded funds (ETFs), made crypto more accessible for many. 

Cryptocurrency-based ETFs make it easier for investors to gain exposure to cryptocurrencies without having to buy them directly. These funds have exploded in popularity since Bitcoin ETFs began trading in US markets last year. 

Is there a bubble around Bitcoin?

While the integration of crypto into mainstream finance has genuinely boosted interest towards Bitcoin, there is a possibility that a so-called bubble is forming. In other words, the price is being ‘blown up’ by investor interest without fundamentals supporting it. 

According to Northeastern University’s crypto expert and professor of international business and strategy Ravi Sarathy, big institutional investors, including MicroStrategy, have been accumulating large pools of this asset, and it is possible that they are propping up the price of the cryptocurrency. MicroStrategy holds a Bitcoin stash worth approximately $65bn.

After the previous reluctant approach from institutional investors, “new US measures authorising Bitcoin ETF funds have made it easier and more convenient for both institutions and retail investors to invest some of their resources in these higher risk/higher return Bitcoin vehicles”,  Sarathy told Euronews Business. 

Bitcoin issuance has a ceiling of 21 million, driving rising demand in the face of a limited supply. “This has also led to the rise of Digital Asset Treasuries (a corporate strategy, ed.) which seek investor funds to invest in a variety of cryptocurrencies and tokens, including Bitcoin, a further fillip to demand, and fuelling rapid Bitcoin price appreciation,” Sarathy said, adding that after a short reaction to further US legislation, longer-term price appreciation could still continue.

How Washington is fuelling Bitcoin’s rally

Interest in Bitcoin has increased dramatically since US President Donald Trump widely campaigned to make the US the world capital for crypto. The US administration’s support for crypto assets reached new highs recently as the government dubbed this week ‘Crypto Week’. Lawmakers in the House are debating a series of bills that could define the regulatory framework for the industry in the United States. 

“Bitcoin and crypto in general, is being propped up by the Trump administration, ironically given its initial promotion as an alternative to government-backed currencies and support from libertarians,” said John Hawkins, senior lecturer at the University of Canberra.

He believes that the token “lacks any fundamental value, and after 16 years, it has still failed to meet its initial aspiration to be a common means of payment. It remains a speculative bubble.”

Others see Trump’s support as a reason to buy. 

Rouge International & Rouge Ventures’ managing director, Desmond Marshall, said that “Together with Trump’s embrace of digital crypto assets, his sons dealing with huge amounts of crypto projects and the strong US dollar, the US government is already buying large reserves of BTC. This is supported by many businesses venturing into this realm with enterprise crypto strategies.”

The most bullish crypto specialists, expecting a large price increase, bet that Bitcoin could reach $250,000, buoyed by institutional demand.

“Corporate and institutional demand is not slowing down while retail is still absent and nation state adoption is just getting started,” said Martin Froehler, CEO of Morpher trading platform.

Bitcoin’s price has increased nearly 25% since the beginning of the year, despite ongoing uncertainties related to tariff tensions, the conflict in the Middle East, and the lack of monetary policy easing in the US.

Is it the right time to buy Bitcoin?

Around 61% of the experts surveyed believe that it is the right time to buy. 

However, caution is always important, according to crypto exchange Zondacrypto’s CEO, Przemysław Kral.

He told Euronews: “With such hype comes the need for caution. No one knows whether the price will go up or down. We always recommend doing your research and getting educated on Bitcoin before investing in it.” 

Kadan Stadelmann, the CTO at Komodo Platform, believes that Bitcoin is going to steadily grow in value over the next six months before it returns to a bear market (when investors mainly sell instead of buy).

“Considering Bitcoin touched $110,000 already, and there’s still at least six months left in this bull run…I expect the peak around Q1 of 2026 and a bear market to follow,” said Stadelmann.

When asked what their expectations were for the very long term, the crypto experts surveyed by Finer said Bitcoin could reach values of $458,647 by 2030 and surpass $1 million by 2035.

How quantum computing might impact Bitcoin’s cryptographic security

The vast majority of the crypto specialists surveyed (79%) see quantum computing as a threat to Bitcoin’s cryptographic security, as quantum computers could potentially break the encryption standards that secure cryptocurrencies.

A quarter of the experts (25%) think that quantum computers will be able to crack Bitcoin within the next five years, and another 25% find that it’s a realistic possibility within the next five to ten years. The remainder (29%) say it’ll take longer than ten years.

Just 8% say that quantum computers pose no threat, and only a third of the experts are confident that the Bitcoin community is somewhat prepared for this threat. 

Disclaimer: This information does not constitute financial advice; always do your own research to ensure it’s right for your specific circumstances. We are a journalistic website and aim to provide the best guides, tips and advice from experts. If you rely on the information on this page, then you do so entirely at your own risk.