A crypto bubble occurs when cryptocurrency prices rise significantly above their intrinsic or practical value due to excessive speculation and investor enthusiasm. During a bubble, investors often buy assets primarily because they expect prices to continue rising, rather than because of the underlying technology or utility.

Like historical financial bubbles, crypto bubbles are characterized by:

Rapid price appreciation

Fear of missing out (FOMO)

Heavy media attention

Increased participation from inexperienced investors

Sharp market corrections when sentiment changes