For decades, financial markets have repeatedly demonstrated the uncomfortable truth that price and value are not always the same thing.
When optimism becomes excessive, financial instruments can assign extraordinary valuations to assets long before their underlying economic value catches up.
The pattern is familiar. A compelling story attracts capital, rising prices create more excitement, and expectations become embedded in valuations.
Eventually, reality enters the room. That is when the difference between what something is worth and what people hoped it would be worth becomes impossible to ignore.
History has provided plenty of examples, from property markets and technology stocks to the speculative excesses surrounding cryptocurrencies. The common denominator is not necessarily that the underlying idea was worthless, but that the valuation could become disconnected from what the asset was actually producing.
