A bubble formation is technically speaking a concept in the market where more and more people are entering and participating in a phenomenon that gets bigger.
It started all the way from the first few batches that enter into the phenomenon and made extraordinary gains from sitting in a pot of gold, then made into the headline news in the media so more people can join in the party. This phenomenon made such a huge amount of gains in a short amount of time such that it will look stupid on people who doesn’t participate in it.
Everyone congratulates one another and that’s when the “wealth effect” starts coming in, a concept which my fellow blogger STE just wrote it here. Essentially, it is a prelude that when the value of the assets you are holding increases in price and you are sitting on a comfortable gains, this security about …