Finance glossary
Asset Bubble
Definition
When prices rise far above intrinsic value before crashing.
An asset bubble forms when speculation and herd behavior drive prices well beyond fundamentals, sustained by the belief that someone will pay more later. Bubbles eventually burst, often violently. Famous examples include the dot-com bubble and the 2008 housing bubble.
In a sentence
The dot-com asset bubble sent prices soaring far above any reasonable value before it burst.
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