Bubbling Up | ARENA

Every bubble has its excesses—the Lamborghini-laden parties of the 2018 run-up, 2021’s $69 million auction for non-fungible tokens—but each leaves behind infrastructure the next round of companies can build upon.

The spread and exploitation of new technologies depends on the construction of relevant networked infrastructure. And bubbles are often the only way to weave the network together before the investments pay off. It’s in the nature of infrastructures to be all or nothing, and bubbles allow capital gains to replace potential dividends as the bits are

bubble can be a collective delusion, but it can also be an expression of collective vision. That vision becomes a site of coordination for people and capital and for the parallelization of innovation.

as the bubble grows, it becomes an increasingly pure bet on a revolution

The trouble is that low rates indiscriminately encourage long-term projects, while the biggest episodes of wealth creation come from building on a single theme.

As is often the case with bubbles,