Hey all,
I want to talk straight about why tulip mania matters today and what that can teach us about bitcoin, real estate, and how to protect your money.
WHAT HAPPENED BACK THEN and WHY IT MATTERS NOW
The story is simple. 400 years ago in the Netherlands people paid crazy money for special tulip bulbs. Some bulbs were worth as much as a house. People traded paper promises to buy bulbs later, they used leverage, and many never owned the bulbs. When buyers stopped showing up the market crashed fast. Whole towns felt it.
Why this is not just history
I study cycles and human behavior. Bubbles repeat because people act the same way when greed and easy credit meet two other things.
People think prices will always go up.
Leverage allows small money to control big bets.
When those three line up you get parabolic moves that end with big losses.
TULIP MANIA KEY FACTS
Tulips were rare and pretty which made people want them.
A broken tulip had strange stripes and was extra valuable.
Traders used taverns and simple contracts to bet on future prices.
At the peak some bulbs sold for tens of thousands of guilders, equivalent of a mansion.
Margin and leverage pushed prices to levels unrelated to real use.
The crash happened fast and left many ruined.
THE HERENGRACHT LESSONS for REAL ESTATE and BUBBLES
There is data for house prices on the Herengracht canal during the tulip era. House prices fell when tulip trading got wild, then recovered later after the crash. That tells us the speculative fever moved from tangible land into a paper market. A similar pattern happened in the 1920s in the US where land markets cooled and speculation moved into leveraged stock trusts. Markets shift where the action and easy profits are.
Source: ResearchGate
WHAT IS THE 18.6 YEAR REAL ESTATE CYCLE and WHY I WATCH IT
The 18.6 year cycle is a long term rhythm in land prices and credit. Think of it like a heartbeat for property markets.
Expansion phase: When credit eases and confidence rises, prices climb.
Mania phase: Many people chase gains, leverage grows, and emotion peaks.
Bust phase: Credit tightens, prices fall, and losses happen.
I track the cycle because this applies to all assets. Year 13 of a cycle tends to show classic late cycle behavior: hubris, risk ignoring, and peak speculation. That is where we are now in my view, and it matters for bitcoin.
BITCOIN TODAY and WHY I SEE TULIP PARALLELS
Bitcoin is different from tulips. It is a digital protocol and a network. But some behavioral traits match tulips.
Culture that pressures people to never sell.
Use case confusion: For many people bitcoin is not a tool they use every day. It is mostly a speculative asset for now.
Leverage and paper bets: You can bet on bitcoin price without owning coins. That separates price from use.
ETFs and institutional flows: When large funds pile in they bring more capital and more attention, which can push prices beyond fundamentals.
Price relative to income: When a single coin equals or exceeds many years of income, that magnifies the emotional stakes.
In the tulip peak common bulbs reached 200 guilders, then crashed 95 percent in months. The famous Semper Augustus tulip sold for the price of a house.
Today bitcoin has reached values that for many people equal years of work. When average incomes are used as a reference the psychology looks similar.
WHY USE-CASE MATTERS?
Tulips had a real use you could trade and export. That gave them a nonzero floor. Bitcoin can be used for things but right now for many people it is not required. If nobody uses it for payments, savings, or settlement and price is only hope, the risk of a zero outcome increases. That is extreme, but bubbles often produce extremes.
BEHAVIORAL SIGNS I WATCH for a PEAK and a DOWNTURN
Here are clear signs that a market is entering the mania or near the top:
People treat risk like a joke.
Everyone is talking about get rich fast stories.
Leverage and margin use explode.
Regulators are chasing market players and exchanges.
Media attention goes from niche to mainstream headlines.
During tulips the taverns were full. Today the social feeds and headlines are full.
SIGNS TO WATCH SPECIFICALLY for BITCOIN and REAL ESTATE
Real estate top watchlist
🔸 rising mortgage debt and low underwriting standards
🔸 more speculative property flips and house as short term trade
🔸 home prices that far outstrip wage growth
Bitcoin top watchlist
🔸 parabolic price moves driven by narrative not adoption
🔸 rapid growth in derivatives and leveraged products
🔸 mass media hype framed as new era inevitability
A PRACTICAL GUIDE to PROTECT your MONEY
I want to give you steps you can use right now in the late stage of the cycle. Simple, clear, and practical.
Slow down: Do not buy because everyone else is buying. Pause and think.
Own cash: Always keep a big portion of money in low risk assets. Cash gives you choices.
Cut leverage: Reduce leverage across the board
Size positions: Small bets are fine. Avoid betting the house. Trim speculative holdings, and shift excess risk into assets with real earnings like high quality businesses or diversified funds bought at reasonable prices
Diversify: Do not put everything into one asset or one story.
Use margin of safety: If you buy stocks follow value rules. If you buy crypto accept the high risk and keep allocation small.
Have a plan: Decide in advance how much loss you can handle and when you will exit.
A CAUTIONARY NOTE about TIMING and FEAR
I do not know the exact day a crash will happen, and neither does anyone else. Timing markets is dangerous. The safe path is to manage risk, not to guess the top. Historically the big wealth transfers happen when people are leveraged and confident. That is the moment to become cautious.
If you find this article interesting, please let us know your thoughts down below here. We also have have other similar articles on our website too.
🧭 Why I’m Building the Smart X Capital Platform
I’m building something for investors who want to move smarter — not faster.
This isn’t for everyone. It’s for those who want to understand wealth through time, not tactics
A place where we’ll track these cycles together, share real-time insights, and learn how to invest with the cycle — not against it. I’ll be offering workshops, tutorials, and in-depth guides to help you build a timeless investing system that grows through every boom and bust.
📚 The Smart X Capital Platform is coming soon — a place to learn, connect, and stay ahead of every major market cycle using data, history, discipline and our community.
🚀 Be First to Join
If you’ve been following my emails and you want to be ready for 2026, now’s your moment.
Because when every major cycle converges — the prepared don’t panic. They profit.
Talk soon,
Ace — Smart X Capital’s Founder
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