Millions of investors were lured by an illusory narrative of ever-rising crypto-asset prices – a narrative that was fuelled by extensive news reports and investment advice on social media, highlighting past price increases and features such as artificial scarcity to create the fear of missing out. Many invested without understanding what they were buying.
[11] Irrational enthusiasm prospered on self-fulfilling expectations:[12] the textbook definition of a bubble. Like in a Ponzi scheme, such dynamics can only continue so long as a growing number of investors believe that prices will continue to increase. Until the enthusiasm vanishes and the bubble bursts.