Hearing the word 'Bubble' will make you think of hot water balloons gradually inflating, then getting bigger, and finally bursting. The crypto market is the same. I notice that the price of a certain coin or project will spike in a short period, then sharply decline again. It’s simply that market demand at that time far exceeds their true value.

Everyone sees the price rise and gets excited, without researching thoroughly and rushing to buy. This coin bubble keeps inflating more and more. I see three main reasons leading to this.

First is FOMO - the fear of missing out. When you see others making profits, you worry: if I don’t buy today, and the price goes up tomorrow, I’ll miss the opportunity. This psychology makes you decide quickly without enough consideration.

Second is excitement. People often don’t look into the technology or practical applications of a project, only see the price increase and think "good." As a result, its real value increases unreasonably.

Third is influence from social media. Influencers on Twitter, Telegram, TikTok constantly say: "This will increase a lot in price, you will make huge profits." People listen and get misled into buying in.

Looking back at history, I clearly remember two major coin bubble events. In 2017, ICOs became famous, with new companies issuing coins to raise capital. Bitcoin also surged strongly then, and people paid attention to crypto and invested in projects without guarantees. Most of these then disappeared, and investors had to bear the losses.

After 2020, DeFi and NFTs became very popular. NFT PFPs like Bored Ape Yacht Club, CryptoPunks reached prices up to millions of USD. People spent hundreds of millions on small pictures, thinking the future would be better. But the market collapsed, and the value of most NFTs plummeted. That’s a lesson about coin bubbles.

So how to quickly recognize a bubble? If the price of a certain crypto rises sharply in a short time, you need to be cautious. A project with no real technology or practical application that only increases in price is a sign of a bubble. If media or influencers shout "buy this, the price will go up a lot," you should also be alert.

How do I think we can protect ourselves from coin bubbles? No matter what project you invest in, do your own thorough research. Who is involved in that organization, how does the technology work, what problem does it solve? Studying before investing is mandatory.

Second, don’t buy when the price is rising and then quickly sell again. That easily causes you to fall into a bubble. Think long-term, only invest in projects you truly trust. And don’t put all your money into a single crypto. Diversify your portfolio, invest in different sectors reasonably.

When the price goes up, take out some profit to ensure you keep your initial capital. That way, even if the market drops later, you won’t lose your principal.

In summary, you now know about crypto bubbles. Be cautious of excitement in the market. Your investment decisions must be made systematically and wisely. Research thoroughly before making a decision. That’s my advice.