Mania also occurs in investing. Investment decisions are sometimes driven by greed and fear with the pressures of balance, evaluation, or reason of reward and risk outcomes. This type of mania usually runs parallel with the development of a specific product, but how does the market mania really work?

To understand how market mania operates in real-time, let's take the improvement of technology and the boom of cryptocurrency as examples.

First stage. Market mania starts with a simple great idea. It is not yet known to many people that the potential for profits is huge. Translated as unlimited profit, such has never been done in the past. Just like in the case of the Internet, people who use the paper system were dubious about how it replaced such an established and recognised system. And then, the foundation of the idea was built, translating into modems, servers, software, and websites, all of which were needed to put the idea into something that is definite. However, investment during this stage don't usually start as lucrative as it's only made by people who know much about it, mostly are the visionaries and people who worked closely on the specific project.

The same question can be asked in the cryptocurrency world. How can a piece of cryptocurrency code replace the contract system, monetary system, and payment systems?

Second stage. Back to when the first websites were made, they were limited, unrefined, and annoyingly slow. People before even doubted about its use. Generally, first ideas start insignificant, but they eventually get better with the help of the evolving technology, cheaper costs, familiarity with the product, and great marketing. When talking about investments, those who adopted it earlier get in easily but without returns… yet. While there are cases where investments make decent returns, they are not enough to convince everyone to jump in and bring them aboard. This is similar to how slow the Internet use was in the 1990s when Internet sites crash or the unreliability of information on search engines. High mining costs, hacking or stealing of accounts, and slow transaction are just some that can be witnessed in the cryptocurrency world.

Third stage. Unlike new products where the business' scene can be altered, the investment scene is quicker to change. The mindset appears to get switched, and that's when the selling spree begins. And in order to determine if a company is overvalued or has no value, an analysis should be done. Those companies that are not earning much and only survive on future and hype prospects are failing. Most likely, fraud and scams will surface as others will take advantage, causing the selling off of securities. On the other hand, companies that have the money are able to invest in new products discreetly, but the progress rate is slowed down depending on how new and unpopular the products are. This also happens in the cryptocurrency world as lending schemes using crypto money are unfolding, resulting in higher incidents of coin theft. Due to the speculative nature of marginal coins, their value can potentially crash.

Fourth stage. In this stage, investments are filled with stories of bad experiences and losses. At the same time, a great idea becomes real, and businesses consider it a boom. Such a product becomes the standard. When an average user gets to notice that the product has been improved, the mass adopts it. While this has not yet happened in the crypto market, those who have corporate backing and a tangible business case will be the survivors of the market crash.

Fifth stage. The final stage is where profits come to fruition as the product becomes the standard. Rather than an idea, the business case is now based on scale and earnings.

Indeed, there's a correlation between the market mania and the crypto market.

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